LKQ Corporation Announces Results for First Quarter 2026
Board of Directors Initiated a Comprehensive Review of Strategic Alternatives to Enhance Shareholder Value
Maintains Focus on Returning Capital to Shareholders with $77 million in Cash Dividends to Shareholders
Dividend of $0.30 Per Share Approved to be Paid in Second Quarter of 2026
Antioch, TENN -- LKQ Corporation (Nasdaq: LKQ) today reported first quarter 2026 financial results.
“We are operating in a challenging environment and are focused on improving our results. Our teams are taking deliberate actions to reduce costs, streamline operations while taking market share, and position ourselves for success going forward as the environment improves. In North America, our business held up well in the quarter with above market growth, and we’re starting to see signs of recovery in the market. In Europe, we saw continual improvements through the quarter, and we’re continuing to work on integration. In early April, we took a large step forward with an ERP migration in a major market that is part of our overall operational improvement initiatives. But there is more work to do. We are operating with urgency and focused on execution, improving our customer relationships, and strengthening the business to create value for our shareholders,” commented Justin Jude, President and Chief Executive Officer.
First Quarter 2026 Financial and Operating Results
Revenue for the first quarter of 2026 was $3,469 million, an increase of 4.3% compared to $3,327 million for the first quarter of 2025. Total parts and services revenue increased 3.6%, which included a 5.1% increase from foreign exchange rates year over year, a 1.6% decrease in parts and services organic revenue, and the net impact of acquisitions and divestitures, which increased revenue by 0.2%.
Net income2 was $77 million compared to $158 million for the same period of 2025. Diluted earnings per share2 was $0.30 compared to $0.61 for the same period of 2025, a decrease of 50.8%. Net income2 for the three months ended March 31, 2026 included a $44 million (or $0.17) impairment of our equity method investment in Mekonomen.
On an adjusted basis, net income1,2 was $171 million compared to $193 million for the same period of 2025. Adjusted diluted earnings per share1,2 was $0.67 compared to $0.74 for the same period of 2025, a decrease of 9.5%.
Strategic initiatives
On January 26, 2026, the Company announced that the Board of Directors initiated a comprehensive review of strategic alternatives to enhance shareholder value. The Company has retained BofA Securities and Goldman Sachs & Co. LLC. as its financial advisors. 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 negative $56 million and negative $96 million, respectively, for the first quarter of 2026. As of March 31, 2026, the balance sheet reflected total debt of $3.9 billion and total leverage, as defined in our credit facility, was 2.6x EBITDA.
Returning Capital to Shareholders
During the first quarter of 2026, the Company distributed $77 million in cash dividends. On April 28, 2026, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on June 4, 2026, to stockholders of record at the close of business on May 21, 2026.
2026 Outlook
“We are seeing improving performance trends across our global footprint, with continued strength in North America and early signs of stabilization in Europe. We are continuing to implement productivity and restructuring initiatives intended to help mitigate the impact of ongoing macroeconomic and cost pressures. Based on our performance to date, we remain focused on executing against our full year 2026 outlook," stated Rick Galloway, Senior Vice President and Chief Financial Officer.
For 2026, management reaffirmed 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% | Unchanged |
Diluted EPS2 | $2.35 to $2.65 | $2.16 to $2.46 |
Adjusted diluted EPS1,2 | $2.90 to $3.20 | Unchanged |
Operating cash flow | $900 to $1,100 million | Unchanged |
Free cash flow1 | $700 to $850 million | Unchanged |
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 April 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 (www.lkqcorp.com), headquartered in Zug, Switzerland, is the leading distributor of automotive aftermarket parts for cars, commercial vans, and industrial vehicles in Europe. It currently employs approximately 26,000 people with a network of more than 900 branches and approximately $6.3 billion in revenue in 2025. The organization supplies more than 100,000 workshops in over 18 European countries in the following regions: Benelux-France, Central Eastern Europe, DACH, Italy, Scandinavia and UK & Ireland.
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
