Standard Motor Products Q2 2026 Earnings Report

Standard Motor Products EPS Results

• Actual EPS: $1.40
• Consensus EPS: $1.39
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $1.13

Standard Motor Products Revenue Results

• Actual Revenue: $526.72 million
• Expected Revenue: $511.68 million
• Beat/Miss: Beat by +$15.04 million
• YoY Revenue Growth: N/A

Standard Motor Products Announcement Details

• Quarter: Q2 2026
• Date: 8/4/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 4, 2026
• Conference Call Time: 11:00AM ET

Standard Motor Products (NYSE:SMP) (NYSE:SMP) is an automotive parts manufacturer and distributor serving the aftermarket for replacement vehicle components. The company develops and supplies parts used in engine management, ignition, fuel systems, emissions control, sensors, and vehicle temperature-control systems.

Its product portfolio includes electronic and electromechanical components, heating and air-conditioning parts, and other replacement products sold under brands such as Standard, Intermotor, Blue Streak and Four Seasons. Standard Motor Products serves professional repair shops, distributors and retailers, primarily in North America, while also supplying customers in selected international markets.

Founded in 1919, the company has expanded from an automotive parts supplier into a manufacturer with engineering, distribution and production operations supporting the replacement-parts industry. Eric P. Sills serves as the company's chairman and chief executive officer.

Standard Motor Products Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong quarterly performance: Adjusted sales increased 6.7% excluding tariff-refund accounting effects, adjusted EBITDA reached a record $63.5 million, and adjusted diluted EPS rose 8.6% to $1.40.
• Positive Sentiment: Temperature Control sales grew 15.7% and Engineered Solutions sales rose 16.8%, while Nissens sales increased 4.8% with continued gains in engine-efficiency products and improving European air-conditioning demand.
• Positive Sentiment: Cash generation and deleveraging improved significantly, with $58.3 million of operating cash flow in the first half, lower inventory, net debt of $510.2 million, and leverage at 2.5 times EBITDA; management remains on track for its 2.0-times target by year-end 2026.
• Neutral Sentiment: Full-year guidance was unchanged at low- to mid-single-digit sales growth and an 11%–12% adjusted EBITDA margin, but management expects tougher second-half comparisons, less foreign-exchange benefit, ongoing distribution costs from the new warehouse, and continued tariff-related margin pressure.
• Positive Sentiment: The company acquired a 50% stake in Techstrong’s Thailand sensor operation, which management expects to strengthen supply-chain control, support low-cost manufacturing, and reduce reliance on China while enabling further Vehicle Control growth.

Presentation

[Operator]

Welcome everyone joining today's Standard Motor Products second quarter 2026 earnings call. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask questions during the question and answer session. To register to ask a question at any time, press star one on your telephone keypad. Please note this call is being recorded and we are standing by should you need any assistance.

[Tony Cristello, VP of Investor Relations at Standard Motor Products]

Yes.

[Operator]

It is now my pleasure to turn the meeting over to Tony Cristello, Vice President of Investor Relations. Please go ahead.

[Tony Cristello, VP of Investor Relations at Standard Motor Products]

Thank you and good morning everyone. Thank you for joining us on Standard Motor Products second quarter 2026 earnings conference call. With me today are Eric Sills, Chairman and Chief Executive Officer, and Nathan Iles, Chief Financial Officer. On our call today, Eric will give an overview our performance in the quarter. Nathan will then discuss our financial results. Eric will then provide some concluding remarks and open the call up for Q&A. Before we begin this morning, I'd like to remind you that some of the material we'll be discussing today may include forward-looking statements regarding our business and expected financial results. When we use words like anticipate, believe, estimate, or expect, these are generally forward-looking statements.

[Tony Cristello, VP of Investor Relations at Standard Motor Products]

Although we believe that the expectations reflected in these forward-looking statements are reasonable, they are based on information currently available to us and certain assumptions made by us. We cannot assure you that they will prove correct. You should also read our filings with the Securities and Exchange Commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward-looking statements. I'll now turn the call over to Eric Sills, our CEO.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Thank you, Tony, and good morning everyone. Welcome to our second quarter earnings call. Overall, we were quite pleased with our performance in the quarter as our top line grew by nearly 7% when adjusting for the accounting treatment of tariff refunds received in the period, which Nathan will explain further in his remarks. Year-to-date, we are now up nearly 8%. We also generated a record-setting $63.5 million in an adjusted EBITDA in the quarter, along with strong operating cash flows. I will walk through each operating segment separately, please note that all future mentions of sales through my remarks are also adjusted for the tariff refunds. Vehicle Control sales were down slightly in the quarter. Much of this was related to customer order patterns, which can vary quarter to quarter based on timing of pipeline orders and other dynamics.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Importantly, customer POS was up in the quarter, demonstrating that this was more related to typical flexing of their purchasing patterns. Additionally, when looking at the product categories within the segment, our wire set business was off significantly, making up most of the quarter's shortfall. As we have previously explained, this is a category in secular decline, dropping by mid-single digits each year, our customers have therefore been adjusting their stocking positions accordingly and thus slowed purchases in the quarter. Year-to-date, the segment remains up nearly 5% as pipeline orders generated a very strong first quarter. Our other North American aftermarket segment, Temperature Control, had a very strong quarter with adjusted sales up nearly 16%. As discussed on our first quarter call, the first half of the year is significantly impacted by the timing of preseason orders, 2026 was shifted more into the second quarter.

[Eric Sills, Chairman and CEO at Standard Motor Products]

This more than offset the slower start to the selling season as May and parts of June were unseasonably cool and wet across much of the country. Excuse me. Year-to-date, we remain up nearly 10%. As we have always said about this seasonal category, individual quarters are less important than the full year, while more favorable weather pattern has kicked in across much of the country, we are going up against very strong comps as we are up almost 15% in last year's third quarter. Next, I will speak about Nissens Automotive, our European aftermarket business. Sales in the quarter were up nearly 5%, which was roughly split between actual growth in local currency and the impact of stronger currency conversion.

[Eric Sills, Chairman and CEO at Standard Motor Products]

In looking at the product categories, we are very pleased with the sizable growth in engine efficiency products driven by items such as turbos and other engine management parts, where we are clearly gaining shelf space. The soft spot was within air conditioning, which was impacted by a late start to the European summer, similar to the U.S. Europe has since set all records for heat, we feel good about a recovery for our AC products. Lastly, as previously discussed, we recently launched two new categories in Europe, leveraging the synergies with our legacy business, while it is early days without much impact yet on our numbers, we are pleased with our momentum. Next, let me speak to our non-aftermarket segment, Engineered Solutions. The strong demand experienced in the first quarter continued with second quarter sales up nearly 17%, bringing year-to-date growth to nearly 15%.

[Eric Sills, Chairman and CEO at Standard Motor Products]

As a reminder, 2025 was a tale of two halves. A soft first half followed by a rebound. While that rebound has continued, the second half of this year is going against more challenging comps. Finally, as announced a few weeks ago, we are pleased to have entered into a joint venture agreement with our longstanding partner, Techstrong, where we acquired 50% of their Thailand operation focused on sensor manufacturing to support our Vehicle Control segment. We see this as an excellent strategic investment hitting on several key pillars. It reinforces our commitment to being a basic manufacturer of key products. It provides additional control of our supply chain, and it launches a low-cost manufacturing operation on which to build that de-risks us from China. Before handing it over to Nathan to provide details, I would like to mention recent leadership changes previously announced.

[Eric Sills, Chairman and CEO at Standard Motor Products]

After well over 40 years of dedicated service, Jim Burke has elected to step down as Chief Operating Officer. Over these years, the contributions that Jim has made are far too numerous to count, and I consider him a major part of our company's success. Jim is staying on as executive advisor and remains a member of our board. I look forward to continuing to work closely with him. At the same time, we announced that Sunil Bhandari has joined us as Chief Operations Officer, with responsibility for all of our operations globally, including manufacturing, distribution, engineering, procurement, and supply chain. Sunil brings with him 25 years of global business and operations leadership, including the last 14 years at Eaton Corporation, and a strong record of driving operational execution. I look forward to seeing all that Sunil can do for us.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Now let me hand this over to Nathan.

[Nathan Iles, CFO at Standard Motor Products]

All right. Thank you, Eric, and good morning, everyone. As we go through the numbers, I'll first give some color on the results for the quarter by segment and at the consolidated level, and then I'll cover some balance sheet and cash flow metrics and finish with an update on our financial outlook for the full year of 2026. Before I talk about our second quarter results, I would like to note that we received refunds in Q2 for amounts previously paid under the IEEPA tariff regime. As per our normal practice of treating tariffs as a pass-through cost, accounting for these tariffs impacted both our sales and cost of goods sold during the quarter. I'll be discussing our results on a non-GAAP basis and excluding the impact of accounting for tariff refunds.

[Nathan Iles, CFO at Standard Motor Products]

First, looking at our Vehicle Control segment results, you can see on the slide that net sales of $198.6 million in Q2 were down 1.6% as we saw a continued secular decline in our wire set category during the quarter, as Eric said. Sales in our engine management product categories continued to be up both the quarter and year so far, leading year-to-date sales to be up 4.7% for the segment despite impacts from wire sales. Vehicle Control adjusted EBITDA of 8.6% in the second quarter was lower than last year. While we've seen some improvement in our gross margin rate, our operating expenses as a percent of sales increased as a result of some elevated distribution costs related to ramping up our new warehouse in Shawnee, Kansas, some higher freight expense, and general inflation and SG&A costs.

[Nathan Iles, CFO at Standard Motor Products]

Next, looking at Temperature Control, net sales in the quarter for that segment of $152 million were up 15.7% for the reasons Eric noted before. Temperature Control's adjusted EBITDA increased in Q2 to 18.2% as good sales volumes led to a higher gross margin rate and operating expenses improved as well. Turning to Nissens. Sales grew there by $4.4 million or 4.8%, reflecting some impact of currency conversion, but also continued sales growth of 2.3% in local currency, even though we were up against a difficult comparison where last year had very robust orders in the first half of the year. Adjusted EBITDA for Nissens of 19% of net sales in Q2 was higher than last year, mainly as a result of improvements in gross margin rate and SG&A expenses.

[Nathan Iles, CFO at Standard Motor Products]

It's important to note that while we had some currency transaction losses that impacted this segment in the first quarter, we saw those stabilize in Q2, helping the segment return to normal profit levels. Sales for our Engineered Solutions segment in the quarter were up 16.8%, and we were pleased to see growth across most markets. The second quarter marked the last quarter of easier comparisons given market cycles, and we expect the sales growth rate for this segment will slow through the remainder of the year. Adjusted EBITDA for Engineered Solutions in the quarter of 9.7% was down from last year as gross margin was lower due to inflationary headwinds, but partly offset by improved operating expense leverage on higher sales.

[Nathan Iles, CFO at Standard Motor Products]

To wrap up our results discussion and put it all together across the four segments for the quarter, consolidated net sales increased 6.7%, while adjusted EBITDA was 12.1% of net sales and $4.4 million better than last year. Further, non-GAAP diluted earnings per share were up 8.6% to $1.40 in the quarter. Looking now at cash flows. Cash generated from operations for the first six months of $58.3 million were $64.2 million better than last year, driven by a significant reduction in inventory levels in the first half of the year, as well as timing of tariff refunds received. We were pleased to see the improvement in inventory after coming into the year with some higher balances to support our sales growth this year. Investing activities show capital expenditures of $14.9 million, which is lower than last year as capital spending related to our new DC is complete.

[Nathan Iles, CFO at Standard Motor Products]

Our financing activities show payments of $14.7 million of dividends as well as $24 million in repayments on our credit agreements. Our net debt stood at $510.2 million, down significantly from Q2 last year. We finished the quarter with a leverage ratio of 2.5x EBITDA and believe we are on track to get to our stated target of 2x by the end of 2026. Before I finish, I want to give an update on our sales and profit expectations for the full year of 2026, which is unchanged from before. We expect sales growth to be in the low to mid-single digit percentage range, driven by continued momentum in North America and Europe and more stable market conditions in our Engineered Solutions segment.

[Nathan Iles, CFO at Standard Motor Products]

This range is lower than the growth we saw through the first half of the year, but keep in mind we've now lapped tariff pricing that went into effect last year. Our Engineered Solutions and Temperature Control segments will face more difficult comparisons in the second half, and we will lose some tailwinds from the foreign currency translation that has helped the Nissens business as the USD-Euro rate stable. Our outlook for adjusted EBITDA margin is a range of 11%-12% and reflects margin benefits to sales growth, but also continued margin compression from passing through tariffs at cost and elevated distribution costs as we ramp up our new warehouse.

[Nathan Iles, CFO at Standard Motor Products]

As we noted in our release this morning and the slide notes, our outlook does not include the impact of ongoing changes in the tariff environment, inflationary impacts from the conflict in the Middle East, or changes in interest rates on our customer supply chain financing programs. In connection with our adjusted EBITDA outlook, we expect interest expense on outstanding debt to be about $30 million for the full year, our income tax rate to be in a range of 27.5%-28%, and depreciation amortization to increase to $45 million-$50 million, as we'll have a full year of depreciation on distribution center investments and also continue to invest in our business generally. To wrap up, we're very pleased with how our year has started with strong sales growth and good profitability. We thank everyone in the company for helping us turn in these results.

[Nathan Iles, CFO at Standard Motor Products]

Thank you for your time. I'll turn the call back to Eric for some final comments.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Thank you, Nathan. In closing, let me spend a moment discussing how we are viewing things for the balance of the year and beyond. Even in the face of a challenging environment, we have enjoyed several consecutive quarters of solid performance. We operate in strong and stable markets and believe we are outperforming due to a combination of structural advantages, customer relationships, and execution. We've made great strides in diversifying our business with new product categories, geographies, and end markets, all with a focus on seeking complementary benefits. We're certainly in the midst of complicated times. It remains unknown what impact the conflict in the Middle East will have, either on costs or potentially on supply chain disruption, but we have a strong track record of navigating these challenges with robust and resilient supply chains and a favorable manufacturing footprint.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Within our legacy business, the North American aftermarket, we believe we excel. The industry itself continues to demonstrate its stability and resilience in the face of turbulent times, and within it, we believe we tend to outperform with a business model that targets repair professionals with quality products and brands they trust. Nissens is a fantastic new leg to our stool and is exceeding our expectations. They're a great company in their own right, and as part of SMP, they provide great business diversity while being similar enough to generate meaningful synergies both to the top and bottom line. Our Engineered Solutions business continues its rebound and is a strong complement to our core business. We remain very bullish about our future. That concludes our prepared remarks. We'll now turn it back over to the moderator to open it up for questions.

[Operator]

Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We'll take our first question from Scott Stember with Roth Capital. Please go ahead. Your line is open.

[Scott Stember, Analyst at Roth Capital]

Good morning. Thanks for taking my questions, and congrats, Jim, on the retirement. You will be missed. Just quick questions on the tariffs. Now that you've received your IEEPA refund, those are gone, but we have some replacement with 301s. What does the go-forward net tariff landscape look for you? Is there some improvement? The other question is whether it's related to the IEEPA at any lower pricing environment. How should we look at potential givebacks to customers within guidance and how we should look at that being reflected in the numbers?

[Eric Sills, Chairman and CEO at Standard Motor Products]

Very good. Thank you, Scott, and thank you for the kind remarks about Jim. I'm sure he appreciates it, and I'm sure he'd still love to go have a beer with you at some point. All right. Let's tackle the first part of your question about the ongoing tariff regime. As you mentioned, there's been a lot of change, but it's really been replacement tariffs. The IEEPAs were declared illegal and were eliminated immediately. They put in place the Section 122 tariffs. Those stayed in place for 150 days, and those were immediately replaced by the Section 301 tariffs. There was a couple other changes in the middle of that, treatment of steel and aluminum derivatives and some other noise as well. It all nets to a very nominal reduction in our total tariff exposure.

[Eric Sills, Chairman and CEO at Standard Motor Products]

As we have been saying really since tariffs became a topic back in 2018, our approach has been to pass these through dollar for dollar and make changes as they occur, albeit with a timing offset of, say, 90 to 120 days. This has been no different. Again, all those changes that I just described all net to a small reduction, and with the timing offset, that's what we'd see. It doesn't have a major impact on the top line. Related to the second part of your question about treatment of the refunds, Nathan described the accounting treatment in period.

[Eric Sills, Chairman and CEO at Standard Motor Products]

In the spirit of that same basic philosophy and transparency and fairness that we've had with customers, we're certainly not going to get into any specific customer discussions that we're having on this call, we do expect a sharing of these refunds as we did pass them along to begin with.

[Scott Stember, Analyst at Roth Capital]

Got it. Then in Temperature Control, obviously some timing of selling is helping, we can all see the record heat that we're seeing across the country in many parts in July and into August. Can you maybe just share with us at POS, what you saw in the quarter, and if you're seeing any subsequent catch-up in the last six weeks since the quarter ended.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Yeah. What we saw within the second quarter on customer POS was pretty soft, especially in the month of May, which was really an unseasonably cool and wet month, and really the beginning of June you saw that as well. Overall, the second quarter, while their purchases from us were up, again, as in my prepared remarks, I said was largely due to the pre-season volume, their sales out in that second quarter were soft. Now it has picked back up, and this is now only directional and but as the summer has continued, and as you are now seeing that heat, and we've had our periods here in the Northeast kind of up and down, but much of the country has remained really pretty solidly warm, we are seeing that POS rebound.

[Eric Sills, Chairman and CEO at Standard Motor Products]

We're still at the halfway mark, we don't want to get ahead of ourselves. It's a long season, it seems over the last few years to be getting longer and longer, it's too early to really predict how the full year is going to turn out, it is nice to see it has rebound.

[Scott Stember, Analyst at Roth Capital]

Got it. Last question on Nissens. I know that obviously the market has been soft there, you've been outperforming. What are you seeing maybe on a market-by-market basis? Any change to the narrative over the last few quarters?

[Eric Sills, Chairman and CEO at Standard Motor Products]

No, it's really an ongoing story which is not altogether dissimilar to what we have here in North America, which is why you hear that the overall market across the continent has had some softness that's largely been on product categories that are more discretionary than ours. Also similar to what we've seen here, the summer started slowly there, now it's just crazy hot across Europe and has been really for much of the summer, obviously air conditioning is a major category for Nissens. We have customers across the entire continent, while you're going to have some potential ups and downs, country by country, region by region, we're pan-European, those do tend to just kind of cancel themselves out.

[Eric Sills, Chairman and CEO at Standard Motor Products]

As we go forward for the second half of this year, pretty much as you said, we continue to see trends continue, and we're pleased.

[Scott Stember, Analyst at Roth Capital]

Got it. That's all I have for now. Thank you.

[Eric Sills, Chairman and CEO at Standard Motor Products]

All right. Thank you, Scott.

[Operator]

Thank you. Once again, that is star and one if you would like to ask a question. We'll take our next question from Bret Jordan with Jefferies. Please go ahead. Your line is now open.

[Bret Jordan, Analyst at Jefferies]

Hey, good morning, guys.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Hey, Bret. Morning.

[Bret Jordan, Analyst at Jefferies]

You called out Vehicle Control at customer POS op. Could you sort of give us an order of magnitude? Is that up in units, price, and I guess both? What's the composition of the op?

[Eric Sills, Chairman and CEO at Standard Motor Products]

Yeah. Thanks, Bret. What we did see in the quarter for POS was, as you said, which was just reflecting what I said, was continue to be positive. It was a modest softening, but it was still up in the low single digits. In terms of the split between pricing and units, it was certainly more towards the pricing side, but the units stayed strong as well.

[Bret Jordan, Analyst at Jefferies]

Okay. When we think about this IEEPA conversation with your customers, is it the kind of thing where if there was going to be sort of a give back, is it cutting them a check or is it sort of giving them lower prices going forward to offset the higher prices they paid around IEEPA? How do we think about how that transaction might work?

[Eric Sills, Chairman and CEO at Standard Motor Products]

Well, it's a fair question. I'm not going to get into the details of this, it's still in discussions with individual customers, the mechanics, we're not going to be talking about that.

[Bret Jordan, Analyst at Jefferies]

All right. Do I get a free question then since we didn't do that one?

[Eric Sills, Chairman and CEO at Standard Motor Products]

For you, absolutely. Take two.

[Bret Jordan, Analyst at Jefferies]

All right. You talked about new categories in Europe that were synergistic. Could we talk maybe about what you're doing in expanding categories in Europe?

[Eric Sills, Chairman and CEO at Standard Motor Products]

Yeah. Well, this was one of the things that really drew us to Nissens where we can really cross-pollinate the two categories that we launched in the beginning of the year. One was a Vehicle Control category, which is a major one for us here in the U.S., which is ignition coils, and very well suited for launching in Europe because we make all of our coils in Europe, in Poland. It gives you that local for local selling strategy there, which while certainly there's a lot of other coil suppliers there, it gives us a really differentiated program. That was the first one, and we're starting to see a certain amount of traction. The other was an air conditioning category that was a part of the AC system that was a gap for them, which was hoses.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Here too, we're a basic manufacturer out of one of our joint ventures in China, which was relatively easy to accelerate a program for them with good market coverage. Both of these were launched early in the beginning of this year, and we're in ramp stage. I think what it shows is that we're developing a nice business model of identifying areas where we can help each other do an accelerated launch. These are obviously things they could have done organically without our help, but because we bring a source of supply, hopefully it's out of our own plants as these last two were, it really allows as you mentioned, acceleration. We did similar things for them, broadening their offering here in North America. North America is a small part of their business.

[Eric Sills, Chairman and CEO at Standard Motor Products]

Not only did it allow broader coverage for things that they didn't have, but we've been able to help open some doors here for them. We're definitely seeing the synergies on helping them expand what they do, and now we're looking at the converse, which is what can they do to help us with our legacy business, and we're in the process of putting together a category that I'm sure you'll come by our booth in APEX in a couple of months, and happy to show you around what we're doing there. We're just really getting started on the growth synergies between the two companies, but we really see that that's where the complementary businesses help each other.

[Bret Jordan, Analyst at Jefferies]

Great. Thank you.

[Operator]

Thank you. At this time, there are no further questions. I'll turn the meeting back over to Tony Cristello.

[Tony Cristello, VP of Investor Relations at Standard Motor Products]

Thank you. We want to thank everyone for participating in our conference call today. We understand there was a lot of information presented. We'll be happy to answer any follow-up questions you may have. Our contact information is available on our press release or investor relations website. Hope you have a great day. Thank you.

[Operator]

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Participants

Executives

• Tony Cristello, VP of Investor Relations
• Eric Sills, Chairman and CEO
• Nathan Iles, CFO

Analysts

• Scott Stember, Analyst at Roth Capital
• Bret Jordan, Analyst at Jefferies