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By Raechel Thankam Job
(Reuters) -Auto parts distributor LKQ Corp on Thursday reported a slump in first-quarter revenue but left its guidance unchanged as it continues to weigh the impact of the trade environment sparked by sweeping U.S tariffs.
Shares of the company tumbled almost 9% in early trading.
Elevated insurance premiums and the cost of repairs have kept consumers from opting for repairable claims, or insurance claims for damage to vehicles, impacting LKQ's spare parts' sales.
Moreover, the company's specialty vehicle business, which distributes equipment and accessories, specifically for recreational vehicles, has also taken a hit as cost-conscious consumers reel back discretionary spend.
On a call with analysts, CEO Justin Jude said falling consumer sentiment, exacerbated by tariff worries, and inflationary pressures for its specialty sector will likely continue throughout 2025.
Although U.S. President Donald Trump signaled possible exemptions on auto-related levies earlier this month, his tariffs have caused bouts of uncertainty in the auto industry.
"Our tariff task force is working on mitigating tariff impacts through potential cost concessions from vendor partnerships and identifying supply chain optimization and SG&A (selling, general and administrative) reductions," Jude said.
LKQ, which imports from China, Mexico, and Taiwan, affirmed its outlook for 2025, excluding potential tariff impacts.
The supplier reported first-quarter adjusted earnings per share of 79 cents, lower compared with a year earlier. Analysts on average had estimated 78 cents, according to LSEG data.
Revenue for the three months ended March 31 came in 6.5% lower at $3.46 billion, also below expectations of $3.57 billion.
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Maju Samuel)