LKQ Q4 Topline Misses By A Whisker, Eyes Organic Revenue Growth In Each Of Its Operating Segments

LKQ Corp LKQ reported fourth-quarter fiscal 2023 sales growth of 16.6% year-over-year to $3.50 billion, missing the consensus of $3.51 billion.

Parts and services organic revenue increased by 2.8% (3.4% on a per-day basis).

The gross margin for the quarter contracted 80 basis points Y/Y to 40%. Operating income for the quarter declined 5.5% to $277 million, and the margin contracted by 190 bps to 7.9%.

Adjusted EPS improved to $0.84 from $0.78 a year ago, beating the consensus of $0.76.

LKQ's operating cash flow for the fiscal totaled $1.4 billion, and the free cash flow was $998 million. The company held $299 million in cash and equivalents as of December 31, 2023. 

Dividend: The company declared a quarterly cash dividend of $0.30 per share of common stock, payable on March 28, 2024, to stockholders of record at the close of business on March 14, 2024.

During the quarter, LKQ invested $30 million to repurchase 0.7 million shares, and for the year ended December 31, 2023, it invested $35 million to repurchase 0.8 million shares.

2024 Outlook: LKQ expects adjusted EPS of $3.90-$4.20, against the consensus of $4.11.

The company projects an organic revenue growth outlook for parts and services of 3.5% – 5.5% and sees an Operating cash flow of ~$1.35 billion.

Price Action: LKQ shares are trading higher by 3.3% at $51.99 on the last check Thursday.