Shares of LKQ Corporation (NASDAQ: LKQ) plummeted 16.42% in intraday trading on Thursday after the auto parts distributor lowered its full-year 2025 outlook, citing muted demand and ongoing challenges in its key markets.

The company reported second-quarter adjusted earnings per share of $0.87, missing analyst expectations of $0.92 and down from $0.98 in the same period last year. Revenue for the quarter came in at $3.64 billion, a 1.9% decrease year-over-year. LKQ's adjusted net income of $225 million also fell short of estimates.

In response to the softer market conditions, LKQ slashed its 2025 full-year guidance. The company now expects adjusted earnings per share between $3.00 and $3.30, down from its previous forecast of $3.40 to $3.70. Organic revenue growth for parts and services is now projected to decline 1.5% to 3.5%, compared to the earlier expectation of 0% to 2% growth.

LKQ cited several factors contributing to the lowered outlook, including a lack of recovery in repairable insurance claims in North America and ongoing tariff uncertainties. In Europe, the company faces general economic softness and geopolitical unrest. To mitigate these challenges, LKQ has implemented cost-reduction measures, having already cut $125 million in costs over the past 12 months with an additional $75 million in savings targeted for 2025.

Despite the current headwinds, LKQ's management reaffirmed its commitment to executing its three-year plan to drive shareholder value. The company is focusing on simplifying its business portfolio, expanding its lean operating model globally, and pursuing a disciplined capital allocation strategy. As LKQ navigates through these cyclical issues, investors will be closely watching for signs of improvement in the company's key markets and the effectiveness of its cost-cutting initiatives.