Shares of Motorcar Parts of America surged approximately 40% in Monday trading following the release of its fiscal fourth-quarter results, which significantly surpassed Wall Street expectations, coupled with an optimistic outlook for new business in fiscal 2027.

Financial results for the fourth quarter of fiscal 2026, ended March 31, showed net sales of $212.3 million, an increase of 9.9% year-over-year and substantially exceeding market expectations of $175.96 million. Gross margin improved markedly to 23.7% from 19.9% in the prior-year period, with gross profit rising 30.9% to $50.4 million. Operating income increased by 29.4% to $21.1 million, while net income reached $9.7 million, or $0.42 per share, a robust turnaround from a net loss of $722,000 in the same quarter last year.

For the full fiscal year 2026, net sales grew 4.3% to $790 million, with net income of $12.4 million, a stark contrast to the net loss of $19.5 million in the previous fiscal year.

The Chairman, President and Chief Executive Officer stated that despite facing headwinds during fiscal 2026, including reduced procurement activity from a major customer, the company finished the year with a strong quarterly performance and has secured significant new business commitments and opportunities, which are expected to materialize gradually in fiscal 2027.

Looking ahead, the company anticipates net sales growth for fiscal 2027 to be between 7.5% and 10.2%, with an annualized rate expected to exceed $900 million by the fiscal year-end. Management highlighted that favorable growth conditions are being provided by shifts in the market landscape due to competitor bankruptcies, increased replacement demand driven by an aging vehicle fleet, and continued expansion in the Mexican market. Furthermore, the ongoing improvement in capacity utilization for brake-related products and operational efficiencies are expected to further drive gross margin expansion.

At the time of writing, shares of Motorcar Parts of America showed significant gains as investors responded positively to the growth prospects for the new fiscal year.