LKQ (LKQ) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $3.41 billion, down 3% year-over-year, with organic parts and services revenue declining 5.1% and EPS at $0.52; adjusted EPS was $0.67, reflecting European underperformance due to ERP disruptions and softer demand.

• North America returned to positive organic growth for the first time in nine quarters, with improved repairable claims and alternative parts usage exceeding 40%; Specialty segment delivered 4.5% organic revenue growth despite margin headwinds.

• Europe faced significant challenges from ERP implementation in Germany, causing operational disruptions and revenue/EBITDA declines, but recovery actions and cost reductions are underway.

• Strategic review, including a potential sale of the Specialty segment or the entire company, remains ongoing with engagement from multiple parties and no set timetable.

• Several acquisitions were completed, including RSI North America, and a $44 million impairment was recorded on the Mekonomen equity investment.

Financial highlights

• Q2 2026 consolidated revenue: $3.41 billion (vs. $3.5 billion prior year); adjusted diluted EPS: $0.67 (vs. $0.84 prior year); GAAP EPS: $0.52–$0.53.

• Segment EBITDA was $349 million (10.2% margin), down from $414 million (11.8%) in Q2 2025.

• Net income attributable to stockholders was $134–$136 million, down from $185–$192 million in Q2 2025.

• Free cash flow for Q2 2026 was $60 million; six-month free cash flow was negative $36 million.

• Returned $129 million to shareholders in Q2 via share repurchases and dividends; $207 million returned in H1 2026.

Outlook and guidance

• 2026 full-year organic parts and services revenue growth expected between -3.0% and -1.0%.

• Adjusted EPS guidance revised to $2.60–$2.90 (previously $2.90–$3.20); GAAP EPS outlook: $1.78–$2.08.

• Operating cash flow forecast: $825–$1,025 million; free cash flow: $625–$775 million.

• Management expects continued restructuring costs in 2026, with approximately $90 million anticipated.

• Europe recovery assumed to be gradual, with Germany returning to 100% run rate by year-end.