(Reuters) – Auto parts distributor LKQ Corp cut its full-year profit expectations on Thursday due to slowing demand for vehicle parts as fewer consumers opt to repair their cars.
Consumers are hesitating to opt for repairable claims, or insurance claims for damage to vehicles, due to rising insurance premiums and the high cost of repairs.
Shares of LKQ, which also sells scrap and other materials to metal recyclers, fell 1.3% in premarket trading.
The company now expects adjusted earnings per share of $3.38 to $3.52 for 2024, down from its prior forecast of $3.50 to $3.70.
“A difficult macro-economic environment … will continue to affect the business in the fourth quarter,” CEO Justin Jude said in a statement.
LKQ now expects 2024 organic revenue for parts and services to fall between 2.75% and 1.75%, compared to its previous forecast of between a decline of 1.25% and an increase of 0.25%.
The company’s third-quarter adjusted earnings of 88 cents per share was one cent short of analysts’ estimates, according to LSEG data.
Its sales of $3.58 billion also missed estimates of $3.63 billion, as volumes declined in the quarter.
LKQ said its board authorized a $1 billion increase in and a one-year extension to the current stock repurchase program.
(Reporting by Raechel Thankam Job and Aishwarya Jain; Editing by Savio D’Souza)