LKQ ups sales forecast on cautious optimism

US-based auto parts recycler and salvage firm LKQ edged up its revenue growth guidance for 2018 to 4.5-5.5pc from 4-5.5pc on "cautious optimism," but flagged uncertainty over impacts from tariffs and volatile scrap prices.

LKQ's cost per vehicle in its self-service segment increased by 19pc in the second quarter from the same period in 2017 because of higher ferrous scrap prices. Cost per vehicle in its full-service salvage operations grew by 5pc year over year. At the same time, LKQ received an average of $199/gt for ferrous scrap in the quarter, up by 33pc from a year ago.

LKQ ramped up North American aftermarket vehicle purchases in the second quarter in order to support operations-wide growth. Wholesale salvage cars and trucks purchases grew by 7.8pc year over year to 83,000, while self-service and "crush-only" car purchases increased by 6.4pc to 150,000.

LKQ said its aftermarket inventory levels at the end of the second quarter were sufficient to meet its growth targets.

LKQ closed five acquisitions in the second quarter, including the €1.5bn deal for European aftermarket parts distributor Stahlgruber, one parts business in England and three in Sweden.

Chicago-based LKQ recorded a $157.9mn profit in the second quarter, up by 4pc from the same period in 2017.