LKQ Misses Q2 Estimates, Slashes Full-Year Outlook as Europe Recovery Stalls
LKQ is trading near its 52-week low of $23.975 (2.0% below the low).
Summary
LKQ reported Q2 revenue of $3.4B, missing estimates, and cut its full-year outlook due to a slower European recovery. Adjusted EPS of $0.67 also missed consensus.
Key Events · Earnings and Guidance · LKQ
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Q2 Revenue and EPS Miss
Revenue of $3.4B fell 3.0% YoY, missing the $3.48B consensus. Adjusted EPS of $0.67 missed the $0.71 estimate, down from $0.84 a year ago.
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Full-Year Guidance Cut
2026 organic revenue growth outlook lowered to (3.0%) to (1.0%) from (0.5%) to 1.5%. Adjusted diluted EPS now seen at $2.60-$2.90, down from $2.90-$3.20.
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Europe Recovery Stalls
Europe organic revenue declined 12.6% in Q2, driven by ERP implementation issues in Germany. The segment's EBITDA margin fell to 7.5% from 9.4% a year ago.
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North America Returns to Growth
North America posted 0.5% organic revenue growth, its first positive quarter in nine, helped by record alternative-parts utilization and moderating insurance premiums.
Analysis · LKQ · Trade & Services
Second-quarter results fell short of expectations, with revenue of $3.4 billion missing the $3.48 billion consensus and adjusted EPS of $0.67 coming in below the $0.71 estimate. The shortfall prompted a cut to full-year 2026 guidance: organic revenue is now expected to decline 1% to 3%, and adjusted EPS is seen at $2.60 to $2.90, down from the prior range of $2.90 to $3.20. A slower-than-expected recovery in Europe—where an ERP implementation in Germany drove a 12.6% organic revenue decline—was the primary drag. North America returned to positive organic growth for the first time in nine quarters, but that bright spot was not enough to offset the European weakness. Adding to the uncertainty, the strategic review process, which includes a potential sale of the company, remains active. With the stock trading near its 52-week low, the guidance cut reinforces concerns about the pace of operational improvement.
At the time of this filing, LKQ was trading at $23.50 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $6.7B. The 52-week trading range was $23.98 to $37.13. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.