LKQ Corporation Announces Results for Second Quarter 2026
Antioch, TENN -- LKQ Corporation (Nasdaq: LKQ) today reported second quarter 2026 financial results and provided an updated outlook for 2026.
"Our second‑quarter performance reflected solid execution across our North America and Specialty segments. North America returned to positive organic growth for the first time in nine quarters, driven by record alternative-parts utilization of over 40%, moderating insurance premiums that were negative in May and June, and continued sequential improvement in repairable claims. Specialty also delivered growth despite a challenging end‑market environment and continued macro‑economic pressure on consumers. Europe fell short of expectations, with results affected by the ERP implementation in Germany. Outside of the ERP impact, the team delivered substantial cost reductions that largely offset the lower volumes we witnessed in the UK and Benelux regions. Overall, the fundamentals of our business are improving, and as market conditions continue to recover, we expect those operational gains to translate into stronger financial performance and profitability in the quarters ahead," commented Justin Jude, President and Chief Executive Officer.
Second Quarter 2026 Financial and Operating Results
Revenue for the second quarter of 2026 was $3.4 billion, a decrease of 3.0% compared to $3.5 billion for the second quarter of 2025. Total parts and services revenue decreased 3.6%, which included a 5.1% decrease in parts and services organic revenue, a 1.0% increase from foreign exchange rates year over year, and the net impact of acquisitions and divestitures, which increased revenue by 0.5%.
Net income2 was $134 million compared to $185 million for the same period of 2025. Diluted earnings per share2 was $0.52 compared to $0.72 for the same period of 2025.
On an adjusted basis, net income1,2 was $170 million compared to $218 million for the same period of 2025. Adjusted diluted earnings per share1,2 was $0.67 compared to $0.84 for the same period of 2025.
Strategic initiatives
In December 2025, the Company announced that it had commenced a process to explore a potential sale of its Specialty segment, and in January 2026, the Company announced that its Board of Directors had initiated a comprehensive review of strategic alternatives, including a sale of the Company, to enhance shareholder value. Our Specialty segment is currently being evaluated as part of the broader strategic review process initiated in January.
The strategic review process remains active, and the Company continues to engage with multiple parties. The review has no deadline or definitive timetable and there can be no assurance the review will result in any transaction or other strategic outcome. The Company will provide updates on the process as appropriate.
Cash Flow and Balance Sheet
Cash flow from operations3 and free cash flow1,3 were $111 million and $60 million, respectively, for the second quarter of 2026. Cash flow from operations3 and free cash flow1,3 were $55 million and negative $36 million, respectively, for the six months ended June 30, 2026. As of June 30, 2026, the balance sheet reflected total debt of $4.0 billion and total leverage, as defined in our credit facility, was 2.8x EBITDA.
Returning Capital to Shareholders
During the second quarter of 2026, the Company invested $52 million to repurchase 1.9 million shares of its common stock and distributed $77 million in cash dividends. For the six months ended June 30, 2026, the Company returned $207 million to its shareholders by investing $53 million to repurchase 1.9 million shares of its common stock and distributing $154 million in cash dividends. Since initiating the stock repurchase program in late October 2018, the Company has repurchased approximately 71 million shares of its common stock for a total of $3.0 billion through June 30, 2026. An aggregate balance of $1.5 billion remains for potential additional stock repurchases through October 25, 2026. On July 28, 2026, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on September 3, 2026, to stockholders of record at the close of business on August 20, 2026.
2026 Outlook
"Second-quarter results reflected improving trends in North America and resilient demand in Specialty, offset by a slower-than-expected recovery following the ERP implementation in Germany. North America remains on track against its full-year plan, and Specialty’s revenue performance has been consistent with our expectations. Our revised outlook reflects a more measured pace of recovery in Europe, while we maintain a disciplined focus on cost management, cash generation and capital allocation. The actions underway in Europe are focused on restoring service levels, aligning the cost structure with current demand and translating operational improvement into stronger financial performance," stated Rick Galloway, Senior Vice President and Chief Financial Officer.
For 2026, management updated the outlook as set forth below:
2026 Full Year Outlook | 2026 Updated Full Year Outlook | |
| Organic revenue growth for parts and services | (0.5%) to 1.5% | (3.0%) to (1.0%) |
| Diluted EPS2 | $2.16 to $2.46 | $1.78 to $2.08 |
| Adjusted diluted EPS1,2 | $2.90 to $3.20 | $2.60 to $2.90 |
| Operating cash flow | $900 to $1,100 million | $825 to $1,025 million |
| Free cash flow1 | $700 to $850 million | $625 to $775 million |
Our outlook for the full year 2026 is based on current conditions, recent trends and our expectations. Outlook includes estimated impacts from the U.S. and retaliatory tariffs in effect as of July 1, 2026 and assumes a global effective tax rate of 26.8% and foreign currency exchange rates near recent average levels, including $1.17, $1.35 and $0.72 for the euro, pound sterling and Canadian dollar, respectively, for the balance of the year. Changes in these conditions may impact our ability to achieve the estimates. Adjusted figures exclude (to the extent applicable) the impact of restructuring and transaction related expenses; amortization expense related to acquired intangibles; excess tax benefits and deficiencies from stock-based payments; losses on debt extinguishment; impairment charges; and gains and losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities).
(1) Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP.
(2) References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.
(3) Cash flow from operations and free cash flow include both continuing and discontinued operations.
Non-GAAP Financial Measures
This release contains (and management’s presentation on the related investor conference call will refer to) non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included with this release are reconciliations of each non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP.
About LKQ Corporation
LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.
About LKQ Europe
LKQ Europe, a subsidiary of LKQ Corporation, headquartered in Zug, Switzerland, is the leading distributor of automotive aftermarket parts for cars, vans and industrial vehicles across 18+ European countries including the following regions: Benelux-France, Central Eastern Europe, DACH, Italy, Scandinavia, and the UK & Ireland.
With around 25,000 employees and 900+ branches, it supplies over 100,000 workshops through strong logistics, digital tools and training via LKQ Academy, while expanding circular economy capabilities via REMAN, Salvage, LKQ SYNETIQ, LKQ Electriq, and ACtronics to advance sustainable, repair-first mobility.
Investor Relations Contact
Joseph P. Boutross
Vice President, Investor Relations
LKQ Corporation
T +1 312 621-2793
E jpboutross@lkqcorp.com
Media Contact Europe
LKQ Europe Communications
