Highlights

  • Bapcor reports 1Q26 sales revenue of AUD 497.7 million, a 2.7% decline from 1Q25.
  • Cost savings initiatives are expected to deliver AUD 20 million pre-tax in 2H26.
  • FY26 underlying NPAT is forecast at AUD 51-61 million, with statutory NPAT expected between AUD 40-50 million.

Bapcor (ASX:BAP) has released an update covering its trading and operational performance for the first quarter of FY26. Management continues to advance the strategy introduced in April 2025, with several operational reviews completed across the business.

Operational Initiatives

During the quarter, key actions included reviewing pricing across major Burson categories to enhance competitiveness and conducting stock range reviews in both the Trade and JAS (auto electrical) divisions to ensure optimal product alignment. Promotional campaigns targeting new and returning customers were implemented, with an emphasis on key accounts. A Retail-specific demand and merchandise planning team was established, while training programs for new sales staff were delivered to operational capability.

Efforts to improve customer engagement were informed by Net Promoter Score feedback, complemented by ongoing recruitment for critical customer-facing roles. Network optimisation continued through targeted store openings, closures, and refurbishments.

The company is investing AUD 3 million in brand and product marketing across the Retail and JAS segments, AUD 6 million in technology upgrades, and a further AUD 7 million to maintain supply reliability during rationalisation within the Networks segment.

Cost Reductions and Efficiency Measures

Bapcor has initiated several cost-saving actions aimed at improving operational efficiency. These include optimising supply chain costs, simplifying support office structures, and reallocating resources towards customer-facing and technology-driven activities. The company has also adjusted its New Zealand distribution network to improve cost management. The total initiative is expected to deliver approximately AUD 20 million in pre-tax savings in the second half of FY26, with implementation costs of AUD 4 million pre-tax recorded in the first half.

An operational review of the tools and equipment business within the Trade division identified margin impacts and stock adjustments that will result in a one-off negative effect on first-half earnings of around AUD 12 million pre-tax.

First Quarter Trading Performance

Bapcor reported group revenue of AUD 497.7 million for Q1 FY26, a 2.7% decline compared with Q1 FY25.

  • Trade: Revenue fell marginally due to competitive conditions, while tighter credit controls and reduced discounting impacted tools and equipment sales.
  • Networks: Earnings improved, reflecting benefits from warehouse rationalisation and a recovering customer base.
  • Retail: Revenue was affected by softer discretionary spending, with gross margin reinvested in branding and promotional activities.
  • New Zealand: Weak macroeconomic conditions weighed on margins, and the business continues to be monitored for potential impairments.

FY26 Guidance

For the first half of FY26, statutory NPAT is expected in the range of AUD 3–7 million, excluding potential impairments in New Zealand. Underlying NPAT is projected at AUD 14–18 million, reflecting approximately AUD 16 million in pre-tax one-off impacts.

For the full year, Bapcor forecasts statutory NPAT between AUD 40–50 million and underlying NPAT between AUD 51–61 million. A stronger second half is anticipated due to pricing adjustments, performance improvements, and the realisation of expected cost savings. Full-year capital expenditure is expected to range between AUD 32–38 million, mainly for targeted branch expansion and technology investments. As of 30 September 2025, undrawn debt facilities totalled AUD 331.6 million.