LKQ Corporation reported a decline in financial performance for the first quarter of 2025, with total revenue decreasing to $3.463 billion from $3.703 billion in the same period of 2024, representing a 6.5% drop. The company's gross margin also fell to $1.377 billion, down from $1.452 billion year-over-year. Despite the revenue decline, net income increased to $169 million, compared to $158 million in the prior year, resulting in earnings per share of $0.65, up from $0.59.
The decrease in revenue was primarily driven by a 6.8% decline in parts and services revenue, which fell to $3.295 billion from $3.535 billion. This decline was attributed to a combination of organic revenue decreases, foreign exchange fluctuations, and the impact of acquisitions and divestitures. Notably, the Wholesale - North America segment saw a revenue drop of 6.0%, while Europe experienced a 7.4% decline. The company also reported a decrease in cost of goods sold, which fell to $2.086 billion from $2.251 billion, leading to a slight improvement in the cost of goods sold as a percentage of revenue.
In terms of strategic developments, LKQ has been actively pursuing a global restructuring plan initiated in 2024, aimed at enhancing profitability by exiting non-core markets and streamlining operations. The company incurred $11 million in restructuring expenses during the first quarter of 2025, a decrease from $36 million in the same period of 2024. Additionally, LKQ's employee headcount remained stable, with no significant changes reported.
Operationally, LKQ's liquidity position as of March 31, 2025, was $1.289 billion, down from $1.456 billion at the end of 2024, primarily due to increased borrowings under revolving credit facilities. The company reported net cash used in operating activities of $3 million, a significant decline from $253 million in the previous year, reflecting increased working capital needs. Looking ahead, LKQ remains focused on organic growth and strategic acquisitions, with plans to continue evaluating markets for potential expansion while maintaining a strong liquidity position to support its operational and capital requirements.
About LKQ CORP
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