LKQ Earnings: Repair Demand Solid, but Profitability Challenged

LKQ reported mixed third-quarter results due to profitability challenges. EBITDA margins were down across all segments. In North America, EBITDA margin contracted 240 basis points. The inclusion of Uni-Select’s financials had a 180-basis-point negative impact, since the acquired firm's products have lower margins than LKQ’s North American products. In Europe, EBITDA margin was down 200 basis points due to a nonrecurring tax charge (70 basis points), labor strike in Germany (40 basis points), and growing customer price sensitivity (90 basis points).