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Auto parts group Bapcor (ASX: BAP) has downgraded its full-year earnings guidance for the second time in FY26, warning that geopolitical concerns and rising interest rates have weighed on trading conditions since late March even as its turnaround program began to gain traction.
The company, which owns the Autobarn and Autopro brands, now expects FY26 underlying EBITDA of $144 million to $150 million, down from the $150 million to $160 million set just 11 weeks earlier in its 26 February half-year results.
Bapcor says the revised outlook reflects a deterioration in consumer and business confidence triggered by the Middle East conflict and higher borrowing costs, which have offset positive momentum that had been building across its trade, retail and network divisions.
Today's update paints a mixed picture for a business deep in a multi-year turnaround for Bapcor which also operates the Midas and ABS auto service centres and Burson Auto Parts, which supplies to trade customers.
Between February and April 2026, all four of the group's business segments delivered sales growth against the prior corresponding period.
Trade rose 0.7 per cent, Networks climbed 3.8 per cent, Retail lifted 1.6 per cent on a like-for-like basis and the New Zealand business added 0.7 per cent in local currency terms.
That represents a marked reversal from the July 2025 to January 2026 period, when the same segments posted declines of 2.4 per cent, 2.8 per cent, 1.2 per cent and 3.8 per cent respectively.
CEO and managing director Chris Wilesmith says the turnaround program is delivering results despite a challenging external environment.
“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," says Wilesmith.
"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.
"We will continue driving initiatives during the important trading months of May and June.”
The group also flagged a potential non-cash impairment charge in its full-year results but did not provide an estimate of the amount.
Bapcor's balance sheet has improved materially since the end of 2025 following the completion of a $200 million equity raising in March at 60c per share.
Unaudited net debt stood at $168 million at the end of April, down from $387.3 million at 31 December 2025.
The guidance cut is the latest in a string of downgrades that have dogged Bapcor since the early months of FY26.
In October 2025, then-CEO Angus McKay said the turnaround was "more challenging and taking longer than expected", acknowledging "historic poor operational practices" that had hampered the business.
Wilesmith, who replaced McKay in the top job in January, has since sought to reset expectations while pointing to the operational improvements flowing through the business.
The company's first-half results released in February underscored the scale of the challenge.
Underlying revenue for the six months to 31 December 2025 came in at $973 million, down 2.3 per cent on the prior corresponding period, with underlying net profit after tax of just $5.5 million.
A statutory loss of $104.8 million included $110.3 million in post-tax significant items tied to restructuring and impairment charges.
Shares in Bapcor were trading 19 per cent lower at 42c each at 1.36pm (AEST).
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