Bapcor Limited has delivered improved sales momentum across all business segments in the February to April 2026 period, reversing the declines seen in the prior six months. However, the company has downgraded its FY26 earnings guidance due to deteriorating trading conditions from late March, driven by the Middle East conflict and rising interest rates, tempering the initial optimism from the turnaround initiatives.
The sales turnaround is material. The Trade Networks segment grew 0.7 percent in February to April versus the prior comparative period, rebounding sharply from a 2.4 percent decline in July to January. Retail sales on a like-for-like basis increased 3.8 percent after falling 2.8 percent in the prior period, representing a 6.6 percentage point reversal. Even the New Zealand business, which faced currency headwinds, grew 0.7 percent after a 3.8 percent decline. These figures demonstrate that management’s turnaround initiatives around pricing, stock availability and team engagement have gained traction with customers and suppliers.
That positive momentum has been significantly undermined by external factors beyond management control. The Middle East conflict, which commenced in late March, has created dual pressures on cost structure and consumer sentiment. Fuel, freight and supplier costs spiked in April and are forecast to continue rising through May and June. Consumer confidence and business sentiment deteriorated alongside these cost pressures, weighing on sales volume and pricing power. The New Zealand segment is also being hurt by NZD depreciation against the AUD.
Bapcor’s revised guidance reflects these crosscurrents. The company now expects underlying FY26 EBITDA of $144 million to $150 million on a post-AASB16 basis, down from prior guidance provided on 26 February. On a pre-AASB16 basis, it expects $62 million to $68 million. The guidance reduction is substantial, with management acknowledging that “softer trading conditions in April continuing through to the end of FY26” will weigh on results.
The balance sheet position remains a point of attention. Unaudited net debt stood at approximately $168 million at the end of April. Management is taking steps to improve working capital through reductions in overdue debtors, improved in-stock availability and inventory reduction initiatives. However, softer trading conditions are expected to defer some of these benefits into FY27. The announcement also flags that “current trading conditions could give rise to a non-cash impairment which will be assessed as part of the customary financial year end process,” suggesting management is preparing investors for potential asset write downs.
For investors, the key question is whether the May and June trading period will stabilise and allow Bapcor to deliver at the upper end of its revised guidance range, or whether conditions will deteriorate further. The company has implemented targeted pricing adjustments to offset fuel cost increases, but sustainability depends on maintaining customer acceptance and avoiding demand destruction. Monitoring sales momentum through the crucial final two months of FY26 will be essential for assessing whether the turnaround narrative can recover momentum in FY27. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Bapcor Limited (ASX: BAP)
Bapcor Limited is an automotive parts, accessories, and equipment distributor operating across Asia Pacific with a network of over 900 locations in Australia and New Zealand. The company employs approximately 5,100 team members and operates through retail brands including Autobarn, Autopro, Midas, and ABS. Bapcor supplies vehicle parts and related services to both DIY customers and professional automotive service providers.
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