LKQ Corporation lowered its full-year adjusted EPS guidance to $2.75 at the midpoint, a 9.8% reduction, after second-quarter revenue fell 3% year on year to $3.41 billion, missing analyst estimates of $3.49 billion. Adjusted EPS of $0.67 also missed the $0.71 consensus, and adjusted EBITDA came in at $349 million versus expectations of $363.1 million. CEO Justin Jude attributed the shortfall largely to a troubled ERP system rollout in Germany that caused service issues and customer churn, while noting that North American operations achieved positive organic growth for the first time in nine quarters. The revised outlook assumes only modest European recovery and no further major ERP deployments this year, with management focusing on restoring service levels in Germany and maintaining cost discipline in challenged markets like the U.K. and Benelux.
LKQ CorporationERP system rollout in Germany caused service issues and customer churn, leading to lowered guidance.