LKQ, the American-based parent company for the likes of Uni-Select and Euro Car Parts, recorded a drop in profit in the second quarter of 2025, prompting bosses to lower forecasts and look at further cost savings.
The results, released on Thursday, revealed that the firm’s non-GAAP profit (which excludes any non-core business, such as restructuring costs) dropped from $0.98 per share in Q2 2024 to $0.87 per share now.
This was 5.8% below market analyst estimates (of $0.92) prompting significant negative market reaction which saw its NASDAQ stock prices fall 30% - a 52-week low.
The report also revealed LKQ recorded pre-tax earnings of $430 million, below analysts’ £446.5m predictions. Revenue fell to £3.64 billion, but this 1.9% year-on-year decline was in line with predictions. The financials were not broken down by individual business or region.
Bosses blamed the profits drop on difficult trading conditions, especially in Europe where “general economic softness and geopolitical unrest are drivers of an uncertain environment”.
What’s more, it pointed to the fact that the company has replaced more than 25% of the continent’s leadership team over the past year while at the same time it tries to reduce costs and streamline SKUs.
As a result, the firm has lowered its outlook for the rest of 2025 given it “is not seeing a recovery” mainly due to tariff uncertainty.
What’s more, it’s looking to reduce costs by $75 million over the rest of the year having already cut $125 million in costs over the past 12 months. These additional cost savings are thought to be focussed on Europe, given the North American market “outperformed the market even as repairable claims across the entire industry declined 9%”.
CEO Justin Jude said: “Our results this quarter reflect a company that is in transformation. We will move faster and harder to simplify our business and reduce costs. As we sharpen our focus on people, process and performance, we will be well positioned to capitalize as the cycle in our sector turns.
“We are committed to delivering better results for our customers, employees and partners and importantly, creating more value for shareholders.”
Chief financial officer Rick Galloway added: “As we look ahead, we are focused on executing on our strategic initiatives to deliver improved financial results. We will continue to follow a disciplined capital allocation strategy that returns capital to shareholders.
“Our strategy includes driving efficiencies and simplifying our business and portfolio. We are navigating through the cyclical issues in our marketplace and will have a stronger company that is well-positioned when the market turns.”
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