Bapcor (ASX: BAP) has reported improved sales momentum across all business segments since launching turnaround initiatives, while lowering full-year earnings guidance due to deteriorating trading conditions.
The automotive aftermarket parts group recorded sales growth across its Trade, Networks, Retail, and New Zealand segments from February to April 2026 compared with the prior corresponding period.
The improvement reversed the declines recorded across all segments between July 2025 and January 2026.
Bapcor now expects to deliver underlying FY26 EBITDA of $144 million to $150m on a post-AASB16 basis and $62m to $68m on a pre-AASB16 basis.
Sales Momentum Improves
Trade sales rose 0.7% from February to April after falling 2.4% between July and January, while networks sales increased 3.8% from February to April after declining 2.8% in the earlier period.
Retail like-for-like sales rose 1.6% after a 1.2% decline, while New Zealand sales measured in New Zealand dollars increased 0.7% after falling 3.8%.
The Trade segment achieved market share growth in parts in the second half of FY26 against the first half, while the Networks segment delivered sales growth from January to April relative to the prior corresponding period.
Trading conditions have materially deteriorated since late March after the commencement of the Middle East conflict and the increase in interest rates, with lower business confidence and consumer sentiment expected to continue through to the end of FY26.
Higher fuel, freight and supplier costs experienced in April are also forecast to persist, with the depreciation against the Australian dollar also negatively affecting earnings from the NZ business segment.
Bapcor has implemented targeted pricing adjustments in selected business units to partially offset the increase in fuel costs.
Working Capital Focus
Unaudited net debt stood at approximately $168m at the end of April 2026, and Bapcor is actively managing its balance sheet and improving its working capital position through reductions in overdue debtors and the collection of expected one-off cash receipts.
In-stock availability has improved across stores and branches after high-velocity items were moved from distribution centres into the network to better serve customer needs.
Actions to reduce overall inventory levels are underway, although softer trading conditions are expected to defer some benefits into financial year 2027.
“We are pleased with the positive momentum of the turnaround, which has been delivered through decisive actions we’ve taken to improve pricing, stock availability, and team engagement,” chief executive officer Chris Wilesmith said.
“This is despite the challenging external environment which was not contemplated when we began this turnaround, and which has slowed the rate of improvement contemplated in our previous guidance.”
Turnaround Initiatives
The turnaround program is focused on improving profitability, optimising the cost of doing business, increasing capital efficiency, and returning the group to growth.
Profitability initiatives include stronger discount management through greater visibility and control over price overrides, along with expanded product ranges in selected Burson stores.
Cost initiatives include reducing external recruitment spending through an in-house recruitment function and cutting high-cost emergency orders from distribution centres through improved replenishment planning.
Growth initiatives include targeted price reductions across more than 10,000 Burson products, reaching more than 70% of customers, as well as loyalty programs and competitive pricing aimed at winning back lost customers.
“We will continue driving initiatives during the important trading months of May and June,” Mr Wilesmith said.
