The strategic alternatives review introduces event-driven upside potential, but the underlying business is deteriorating with negative organic growth, margin compression, and negative free cash flow. Monitor for any strategic transaction announcement or further guidance cuts; the lowered GAAP EPS outlook signals management expects continued headwinds.
Price Chart
Executive Summary
LKQ reported Q1 2026 adjusted EPS of $0.67, missing the $0.74 consensus by 9.5%, while revenue of $3.47B slightly beat the $3.39B estimate. The company lowered its full-year GAAP EPS guidance to $2.16-$2.46 from $2.35-$2.65, though adjusted EPS guidance was maintained at $2.90-$3.20. The strategic alternatives review adds uncertainty, while a $44M impairment on the Mekonomen investment and negative free cash flow of -$96M signal operational headwinds.
Key Financial Metrics
Key Facts
- Adjusted diluted EPS of $0.67 missed consensus of $0.74 by 9.5% and declined 9.5% YoY from $0.74
- GAAP diluted EPS of $0.30 fell 50.8% YoY from $0.61, including a $0.17 impairment on Mekonomen equity method investment
- Revenue of $3,469M grew 4.3% YoY, but organic parts and services revenue declined 1.6%
- Full-year 2026 GAAP EPS guidance lowered to $2.16-$2.46 from $2.35-$2.65; adjusted EPS guidance maintained at $2.90-$3.20
- Operating cash flow was negative $56M and free cash flow negative $96M in Q1
- Board initiated a comprehensive review of strategic alternatives with BofA Securities and Goldman Sachs as advisors
- Segment EBITDA margin contracted to 10.0% from 11.4% YoY, with all three segments showing declines
- Quarterly dividend of $0.30 per share maintained
Financial Impact
Adjusted EPS miss of ~$0.07 vs consensus; GAAP EPS guidance cut by $0.19-$0.19; $44M impairment charge; negative FCF of $96M
Risk Factors
- Strategic alternatives review may not result in any transaction, creating disappointment risk
- Continued organic revenue decline in Europe (-4.0%) and North America (-0.4%)
- Negative free cash flow and operating cash flow strain balance sheet with $3.9B debt
- Tariff exposure and macroeconomic pressures could further pressure margins
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-3284661 |
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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