LKQ’s second quarter results were met with a significant negative market reaction, as the company’s non-GAAP profit came in below Wall Street’s expectations despite revenue meeting consensus estimates. Management pointed to persistent softness in both North American and European end markets, with CEO Justin Jude noting that “the results are yet to show this progress and the macro headwinds necessitated our revised guidance.” Leadership highlighted heightened competition, weak repairable claims volumes, and operational missteps in Europe as primary contributors to underperformance.

Is now the time to buy LKQ? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions LKQ’s Q2 Earnings Call

• Scott Lewis Stember (ROTH): Asked about the lack of recovery in used car pricing and its impact on repairable claims. CEO Justin Jude responded that used car prices have not increased enough to drive claim volumes, and the gap between repair costs and used car values persists.
• Bret David Jordan (Jefferies): Inquired about the competitive landscape in Europe, particularly pricing pressures. Jude noted LKQ lost only one major contract due to pricing but chose not to chase unsustainable price cuts, focusing instead on service and value.
• Craig R. Kennison (Baird): Questioned when unrepaired vehicle trends might bottom out. Jude said it was difficult to predict, as high insurance rates and used car pricing need to normalize before claim volumes recover.
• Gary Frank Prestopino (Barrington Research): Asked about the timeline for European cost cuts and leadership effectiveness. Galloway replied that most cost measures should be implemented by year-end, with full benefits expected in 2026.
• Jash Patwa (JPMorgan): Queried about the potential impact of new state appraisal legislation and supplier production shifts. Jude indicated it is too early to see effects from legislative changes, and no significant supply base moves have occurred yet regarding tariffs.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of cost reduction and leadership changes in European operations, (2) any signs of stabilization or recovery in North American repairable claims volumes, and (3) the company’s ability to manage tariff-related headwinds and maintain price discipline. Execution on SKU rationalization and progress in specialty segments will also be key indicators.

LKQ currently trades at $29.91, down from $38.62 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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