LKQ Corporation 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,” commented Justin Jude, President and Chief Executive Officer.
“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.”
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%.
Figures in USD.
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. Its 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 said it 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 Previous 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 flow3 | $900 to $1,100 million | $825 to $1,025 million |
| Free cash flow1,3 | $700 to $850 million | $625 to $775 million |
The 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 the 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).
Conference Call Details
LKQ held a conference call and webcast on July 30, 2026 at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) with members of senior management to discuss the company’s results. To access the conference call, please dial (833) 461-5787. International access to the call may be obtained by dialing (626) 884-3620. The conference call will require you to enter conference ID: 434311175.
Webcast and Presentation Details
The audio webcast and accompanying slide presentation can be accessed at (www.lkqcorp.com) in the Investor Relations section.
An online replay of the audio webcast will be available on the Company’s website and can be accessed through the Investor Relations section, investor.lkqcorp.com under “Events”. Please allow approximately two hours after the live presentation before attempting to access the replay.
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