LKQ Corporation Reveals $125-155M Europe Restructuring Plan

By Bobby Samwell • Tuesday, April 23 15:25 • Permanent Link

LKQ Corporation recently released its 10-Q report, providing insights into its financial performance and operations. The company, a global distributor of vehicle products, operates through four segments: Wholesale-North America, Europe, Specialty, and Self Service. LKQ distributes a wide range of products, including automotive parts, accessories, and specialty vehicle aftermarket products, serving various markets across the United States, Canada, the United Kingdom, Germany, and other European countries.

In the 10-Q report, LKQ highlighted its 1 LKQ Europe plan, aimed at centralizing and standardizing key functions to operate the Europe segment as a single business. The plan involves restructuring and transformation expenses, as well as capital expenditures, with costs expected to range between $125 million to $155 million for 2024 through the projected plan completion date in 2027.

The report also discusses the company's sources of revenue, which include parts and services, and other revenue sources such as scrap and other metals sales. LKQ emphasized the impact of acquisitions and divestitures, as well as fluctuations in foreign exchange rates, on its revenue. The company's revenue for the three months ended March 31, 2024, totaled $3.7 billion, reflecting a 10.6% increase from the same period in 2023.

Cost of goods sold as a percentage of revenue increased to 60.8% for the three months ended March 31, 2024, from 59.0% for the same period in 2023. The increase was attributed to various factors, including mix shift towards lower margin segments.

LKQ also highlighted key performance indicators, including organic revenue growth, Segment EBITDA, and free cash flow, which are used as targets in determining incentive compensation at various levels of the organization. The company's net income for the three months ended March 31, 2024, was 4.3% of total revenue, down from 8.1% for the same period in 2023.

Today the company's shares have moved -14.7% to a price of $41.72. For the full picture, make sure to review LKQ's 10-Q report.

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