ARB Posts $361.7M Sales, Profit Edges Down 0.7% in 1H FY2025

Solid Sales Growth Amid Challenging Conditions

ARB Corporation Limited has reported its financial results for the first half of fiscal year 2025, revealing a 5.9% increase in sales revenue to $361.7 million. This growth was achieved despite a challenging global environment marked by depressed new vehicle sales and constrained consumer discretionary spending. The company’s international markets, particularly exports, were the standout performers, delivering a robust 15.4% increase in sales.

While sales momentum was strong, profit before tax saw a slight decline of 0.7% to $70.3 million, reflecting margin pressures and increased operating costs. Excluding non-operating items, underlying profit before tax fell 4.5%, impacted notably by an 18% rise in employee-related expenses as ARB invests in talent and growth initiatives.

Segment Performance and Market Dynamics

The Australian aftermarket segment recorded a modest 1.9% sales increase, though growth slowed in the second quarter amid inventory adjustments by stockists and a significant downturn in new vehicle sales for key 4x4 models such as the Ford Ranger and Toyota Hilux. Despite these headwinds, ARB continues to expand its retail footprint domestically, with new and upgraded stores planned to support future growth.

Exports remain a bright spot, with double-digit growth across all regions. The US market, bolstered by the commencement of a Toyota contract and the strategic acquisition of 4 Wheel Parts, contributed significantly to the export surge. New Zealand also posted a 20% sales increase, benefiting from favorable government tax policy changes on new pick-up vehicles.

Strategic Investments and US Expansion

ARB’s US expansion strategy is gaining traction through its increased equity stake in Off Road Warehouse (ORW) and the acquisition of 4 Wheel Parts, which together operate 53 retail stores across key states. Integration efforts are underway to streamline operations and enhance ARB product visibility, with early signs of improved profitability as ORW/4WP achieved a profit in January 2025.

Complementing retail growth, ARB has established a design engineering office in Southern California to accelerate product development tailored to US market needs, including the iconic Poison Spyder brand relaunch planned for 1H FY2026.

Outlook and Future Growth Prospects

Looking ahead, ARB maintains a cautiously optimistic outlook. The company’s aftermarket order book remains healthy, and export order books have increased, underpinning confidence in continued growth. Sales to original equipment manufacturers (OEMs) are expected to remain steady, supported by new contracts under negotiation.

ARB’s strategic investments in product innovation, distribution expansion, and retail network enhancement position it well for long-term success. The company’s strong balance sheet, with $23 million in cash, supports ongoing growth initiatives, including the planned launch of an eCommerce platform in mid-2025.

As ARB celebrates its 50th anniversary, it reflects on its legacy while gearing up for the next phase of expansion, particularly in the US and international markets, where it sees significant opportunity despite near-term challenges in the Australian domestic market.