diff --git a/src/Controls/src/Core/Handlers/Shell/Windows/ShellFlyoutItemView.cs b/src/Controls/src/Core/Handlers/Shell/Windows/ShellFlyoutItemView.cs
index 5718cef5b539..4400e9fa1c0f 100644
--- a/src/Controls/src/Core/Handlers/Shell/Windows/ShellFlyoutItemView.cs
+++ b/src/Controls/src/Core/Handlers/Shell/Windows/ShellFlyoutItemView.cs
@@ -128,7 +128,9 @@ void ShellElementPropertyChanged(object sender, PropertyChangedEventArgs e)
 
 		protected override global::Windows.Foundation.Size ArrangeOverride(global::Windows.Foundation.Size finalSize)
 		{
-			if (this.ActualWidth > 0 && _content is IView view)
+			// Replaced ActualWidth with finalSize.Width since ActualWidth updates only after ArrangeOverride completes, 
+			// ensuring accurate layout during the initial arrangement phase.
+			if (finalSize.Width > 0 && _content is IView view)
 			{
 				view.Arrange(new Rect(0, 0, finalSize.Width, finalSize.Height));
 				return finalSize;
diff --git a/src/Controls/tests/TestCases.Android.Tests/snapshots/android/VerifyTemplateViewMarginOnInitialDisplay.png b/src/Controls/tests/TestCases.Android.Tests/snapshots/android/VerifyTemplateViewMarginOnInitialDisplay.png
new file mode 100644
index 000000000000..27c540446f02
Binary files /dev/null and b/src/Controls/tests/TestCases.Android.Tests/snapshots/android/VerifyTemplateViewMarginOnInitialDisplay.png differ
diff --git a/src/Controls/tests/TestCases.HostApp/Issues/Issue18423.cs b/src/Controls/tests/TestCases.HostApp/Issues/Issue18423.cs
new file mode 100644
index 000000000000..04b0fcd7b185
--- /dev/null
+++ b/src/Controls/tests/TestCases.HostApp/Issues/Issue18423.cs
@@ -0,0 +1,40 @@
+namespace Maui.Controls.Sample.Issues
+{
+
+	[Issue(IssueTracker.Github, 18423, "[Windows] Shell flyout template items do not have a margin applied on first show", PlatformAffected.UWP)]
+	public partial class Issue18423Shell : Shell
+	{
+		public Issue18423Shell()
+		{
+			FlyoutBehavior = FlyoutBehavior.Flyout;
+
+			ItemTemplate = new DataTemplate(() =>
+			{
+				return new Label
+				{
+					AutomationId = "LabelWithMargin",
+					Margin = new Thickness(20),
+					Text = "Title"
+				};
+			});
+
+			ShellContent shellContent = new ShellContent
+			{
+				Title = "Home",
+				ContentTemplate = new DataTemplate(typeof(Issue18423Page)),
+				Route = "MainPage"
+			};
+
+			Items.Add(shellContent);
+		}
+	}
+
+	public partial class Issue18423Page : ContentPage
+	{
+		public Issue18423Page()
+		{
+			BackgroundColor = Colors.HotPink;
+			this.Content = new Label() { AutomationId = "MainPageLabel", Text = "Content" };
+		}
+	}
+}
\ No newline at end of file
diff --git a/src/Controls/tests/TestCases.Mac.Tests/snapshots/mac/VerifyTemplateViewMarginOnInitialDisplay.png b/src/Controls/tests/TestCases.Mac.Tests/snapshots/mac/VerifyTemplateViewMarginOnInitialDisplay.png
new file mode 100644
index 000000000000..9543ba18bbca
Binary files /dev/null and b/src/Controls/tests/TestCases.Mac.Tests/snapshots/mac/VerifyTemplateViewMarginOnInitialDisplay.png differ
diff --git a/src/Controls/tests/TestCases.Shared.Tests/Tests/Issues/Issue18423.cs b/src/Controls/tests/TestCases.Shared.Tests/Tests/Issues/Issue18423.cs
new file mode 100644
index 000000000000..c1d01d3a3953
--- /dev/null
+++ b/src/Controls/tests/TestCases.Shared.Tests/Tests/Issues/Issue18423.cs
@@ -0,0 +1,24 @@
+using NUnit.Framework;
+using UITest.Appium;
+using UITest.Core;
+
+namespace Microsoft.Maui.TestCases.Tests.Issues
+{
+	public class Issue18423 : _IssuesUITest
+	{
+		public Issue18423(TestDevice testDevice) : base(testDevice)
+		{
+		}
+
+		public override string Issue => "[Windows] Shell flyout template items do not have a margin applied on first show";
+
+		[Test]
+		[Category(UITestCategories.Shell)]
+		public void VerifyTemplateViewMarginOnInitialDisplay()
+		{
+			App.WaitForElement("MainPageLabel");
+			App.TapShellFlyoutIcon();
+			VerifyScreenshot();
+		}
+	}
+}
\ No newline at end of file
diff --git a/src/Controls/tests/TestCases.WinUI.Tests/snapshots/windows/VerifyTemplateViewMarginOnInitialDisplay.png b/src/Controls/tests/TestCases.WinUI.Tests/snapshots/windows/VerifyTemplateViewMarginOnInitialDisplay.png
new file mode 100644
index 000000000000..8a35c1caf216
Binary files /dev/null and b/src/Controls/tests/TestCases.WinUI.Tests/snapshots/windows/VerifyTemplateViewMarginOnInitialDisplay.png differ
diff --git a/src/Controls/tests/TestCases.iOS.Tests/snapshots/ios/VerifyTemplateViewMarginOnInitialDisplay.png b/src/Controls/tests/TestCases.iOS.Tests/snapshots/ios/VerifyTemplateViewMarginOnInitialDisplay.png
new file mode 100644
index 000000000000..c3665cffd10e
Binary files /dev/null and b/src/Controls/tests/TestCases.iOS.Tests/snapshots/ios/VerifyTemplateViewMarginOnInitialDisplay.png differ