LKQ Reports Q2 Earnings: Mixed Performance Across Regions
LKQ Corporation (NASDAQ:LKQ) posted second-quarter revenue of $3.4 billion, down from $3.5 billion in the prior year period. Adjusted diluted earnings per share came to $0.67 compared to $0.84 last year, primarily due to lower profitability in Europe. North America saw 0.5% organic growth for the first time in nine quarters and reported an EBITDA margin of 14.1%. In contrast, European revenue declined by 12.6%, largely impacted by disruptions from a new ERP implementation in Germany that cost approximately $140 million in lost quarterly revenue. The company recorded over $40 million in Europe-related cost savings and expects the German operations to stabilize with revenues reaching about 85% of normal levels by July's end. LKQ also revised its full-year guidance downward, now expecting adjusted EPS between $2.60 and $2.90 compared to a previous range of $2.90 to $3.20. The company generated strong cash flow with operating cash flow at $111 million for the quarter and free cash flow rising from negative $36 million in H1 2026 to positive $60 million. LKQ used part of its liquidity, which stands at $1.9 billion, to prepay a U.S. term loan with $500 million in July. The company also returned value to shareholders through repurchases and dividends totaling $129 million during the quarter.
Tickers: $LKQ
Topics: ebitda erp_impact organic_growth revenue