The guidance cut and Europe headwinds are significant negative signals. Monitor the strategic review outcome (potential sale of Specialty or whole company) as a catalyst. The ERP recovery in Germany is key — any positive update on service levels could reverse sentiment. The active buyback provides a floor but does not offset fundamental deterioration.
Price Chart
Executive Summary
LKQ reported Q2 2026 adjusted EPS of $0.67, missing consensus of $0.71 by 5.6%, and revenue of $3.408B, missing estimates of $3.48B. The miss was driven by a 3.0% YoY revenue decline and a 9.6% drop in Europe, where an ERP implementation in Germany disrupted operations. Management lowered full-year guidance across all key metrics, including organic revenue growth to (3.0%)-(1.0%) from (0.5%)-1.5%, and adjusted EPS to $2.60-$2.90 from $2.90-$3.20, signaling a slower-than-expected recovery in Europe.
Key Financial Metrics
Key Facts
- Q2 2026 revenue $3.408B, down 3.0% YoY from $3.513B, missing $3.48B consensus
- Adjusted diluted EPS $0.67 vs $0.84 YoY, missing consensus of $0.71 (-5.6%)
- Europe revenue fell 9.6% YoY to $1.447B, with organic decline of 12.6% due to ERP disruption in Germany
- Full-year 2026 guidance lowered: organic revenue growth to (3.0%)-(1.0%), adjusted EPS to $2.60-$2.90, operating cash flow to $825M-$1,025M, free cash flow to $625M-$775M
- North America returned to positive organic growth (+0.5%) for first time in nine quarters; Specialty grew 5.0%
- Strategic review process remains active; company continues to engage with multiple parties
- Company repurchased 1.9M shares for $52M in Q2; $1.5B remaining under buyback authorization through Oct 2026
- Total debt $4.0B, leverage 2.8x EBITDA as of June 30, 2026
Financial Impact
Revenue miss of ~$72M vs consensus; adjusted EPS miss of $0.04; full-year guidance lowered by $0.30 at midpoint on adjusted EPS; operating cash flow guidance cut by $75M at midpoint
Risk Factors
- Europe recovery slower than expected, especially post-ERP in Germany
- Tariff impacts from U.S. and retaliatory measures could further pressure margins
- Strategic review may not result in any transaction, creating uncertainty
- Leverage at 2.8x EBITDA limits financial flexibility
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001065696-26-000041 |
| Document: lkq-20260730.htm | 0001065696-26-000041 |
| Document: 0001065696-26-000041-index-headers.html | 0001065696-26-000041 |
| Document: 0001065696-26-000041-index.html | 0001065696-26-000041 |
| Document: 0001065696-26-000041.txt | 0001065696-26-000041 |
| 8-K Data (Synthetic) | 0001065696-26-000041 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Jul 30, 2026 9w ago | 8-K | $22.60 $25.36 | ▼ −12.21% | ▼ −8.25% | $22.80 (−0.88%) |
Apr 30, 2026 22w ago | Press Release | $31.48 $27.04 | ▲ +14.11% | ▲ +19.33% | $22.80 (+27.57%) |
Apr 2, 2026 26w ago | Press Release | $28.16 $31.58 | ▲ +12.15% | ▲ +2.28% | $22.80 (−19.03%) |
US Market Status
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