LKQ Shares Crash To 52-Week Low On Slashed Outlook

LKQ Corporation (NASDAQ:LKQ) shares plummeted over 21% on Thursday after the automotive parts distributor reported second-quarter adjusted earnings that missed analyst expectations and significantly cut its full-year guidance, citing ongoing macroeconomic headwinds and a lack of recovery in North American repairable claims.

The company reported second-quarter adjusted earnings per share of 87 cents, missing the analyst consensus estimate of 92 cents. Quarterly sales of $3.64 billion (down 1.9% year over year) was in line with the Street view.

North American organic revenue outperformed the market even as repairable claims across the entire industry declined 9%. In Europe, LKQ Corporation has replaced more than 25% of the leadership team and continues to focus on reducing costs, rationalizing SKU’s and enhancing revenue opportunities, including entering into a strategic partnership to expand our salvage business.

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Organic parts & services revenue declined 3.4% year‑over‑year (2.7% on a per‑day basis). Acquisitions and divestitures trimmed revenue by 1.0% while foreign exchange rates added 2.3%, resulting in a net 2.1% decrease.

The company said its focus on cost reduction measures has resulted in more than $125 million in costs taken out over the past 12 months with an additional $75 million targeted for 2025.

Gross profit in the quarter under review remained relatively flat on a year-over-year basis to $1.412 billion, with gross margin flat at 38.8%.

View more earnings on LKQ

Adjusted EBITDA in the quarter under review decreased to $423 million from $429 million a year ago. The company exited the quarter with cash and equivalents at $289 million, and inventories worth $3.394 billion.

As of June 30, 2025, the balance sheet reflected total debt of $4.5 billion, and total leverage, as defined in credit facility, was 2.6x EBITDA. On July 22, the company declared a quarterly cash dividend of 30 cents per share of common stock, payable on August 28.

Outlook

In North America, the company is not seeing a recovery in the repairable claims and tariff uncertainty continues.

In Europe, general economic softness and geopolitical unrest are drivers of an uncertain environment.

LKQ cut its fiscal year 2025 adjusted EPS guidance to $3.00-$3.30 from $3.40-$3.70, falling short of the $3.52 consensus estimate.

Organic revenue for parts and services is expected to decline in the range of 3.5% to 1.5% (prior view: growth of upto 2%).

The company’s stock has hit a 52-week low of $32.78 following its earnings report. The key factors behind the decline were a miss on adjusted earnings per share and a revised, lower outlook for the full year, both of which have unsettled investors.

Price Action: LKQ shares are trading lower by 21.1% to $30.48 at last check Thursday.

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