A global distributor of alternative vehicle replacement parts, LKQ supplies aftermarket, salvage, and reconditioned collision and mechanical parts to repair shops across North America and Europe, plus specialty accessories for RVs, trucks, and boats. Founded in 1998 by a former Waste Management executive, it consolidated thousands of independent junkyards—and its name comes from the trade term "Like-Kind-Quality," meaning recycled parts considered equivalent to new ones.
Europe parts revenue fell 9.6% on ERP issues, pulling Q2 revenue down 3% to $3.4B
Europe's parts business fell 9.6% on ERP implementation problems, dragging the quarter. declined 3.0% to $3,408M and fell 29.3% to $0.53 as the Europe 's operational disruption and higher more than offset North America pricing gains. The company is working through integration and systems issues while remains above $1.9B.
Key takeaways
Europe parts & services fell $154M (9.6%), including a 12.6% organic decline from temporary ERP implementation challenges in Germany, competition, and weak economies, driving the consolidated revenue drop of $105M to $3,408M.
North America parts & services rose $9M (0.5%) on pricing initiatives to recoup tariff costs, and grew $23M (5.0%) on marine, RV, and automotive volume.
Consolidated improved 0.2 points to 38.8%, but rose 1.7 points to 29.0% of on higher professional fees, self-insurance reserves, and credit losses.
Section summaries
Management's Discussion and Analysis
Consolidated revenue fell 3% to $3.4B in Q2 2026, driven by a 9.6% decline in Europe parts & services revenue due to ERP implementation challenges.
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Total decreased $105 million (3.0%) to $3,408 million in Q2 2026, with parts & services down $122 million (3.6%) and other revenue up $17 million.
fell 24.7% to $225M and declined 29.3% to $0.53 ; sequentially rose 76.7% from $0.30 in Q1 2026.
H1 2026 fell to $55M from $293M a year earlier due to a $223M increase in outflows, producing negative of $36M; total was $1,930M after a $289M increase.
The company prepaid a $500M in July 2026, and the 2025 annual report's strategic alternatives review including a potential company sale remains ongoing with no announcement this quarter.
What changed
Q2 2026 organic parts and services decline: earlier filings flagged whether the 1.6% Q1 2026 drop would narrow or deepen; Europe's 12.6% organic fall pushed the consolidated parts & services decline to 3.6% this quarter.
remained negative at $36M for H1 after Q1's -$96M; the prior watch item on Q2 recovery was not met as H1 fell to $55M from $293M.
Strategic alternatives review from the FY2025 10-K carried into Q2 with no sale or divestiture announced, leaving the outcome still open.
ERP implementation in Germany emerged as a new operational driver of Europe's 9.6% fall, not previously flagged as a near-term risk in Q1 2026.
The April 22, 2026 stockholder class action over and integration was not updated this quarter and remains outstanding from Q1.
What to watch
Q3 2026 Europe parts to see if the 9.6% decline reverses after the German ERP implementation stabilizes
H2 2026 after negative $36M in H1 2026 and the July $500M prepayment
Announcement from the Board's strategic alternatives review including any company sale or divestiture
Resolution or progression of the April 22, 2026 stockholder class action over and integration
parts & services fell $154 million (9.6%) due to a 12.6% organic decline from temporary operational challenges following an ERP implementation in Germany, heightened competition, and difficult economic conditions.
North America parts & services grew $9 million (0.5%) on pricing initiatives to recoup tariff costs, while grew $23 million (5.0%) on volume growth in marine, RV, and automotive product lines.
Consolidated improved 0.2 percentage points to 38.8%, but SG&A as a percentage of rose 1.7 points to 29.0%, driven by higher professional fees, self-insurance reserves, and credit losses.
fell to $55 million in H1 2026 from $293 million a year earlier, largely due to a $223 million increase in cash outflows, resulting in negative of $36 million.
Total liquidity was $1,930 million at June 30, 2026, down $274 million from year-end 2025, after increasing borrowings by $289 million; the company prepaid a $500 million term loan in July 2026.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks arising from adverse changes in foreign exchange rates, interest rates, commodity prices and inflation. There have been no material changes to our market risks from what was disclosed in Item 7A of Part II of our 2025 Form 10-K.
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We are exposed to market risks arising from adverse changes in foreign exchange rates, interest rates, commodity prices and inflation. There have been no material changes to our market risks from what was disclosed in Item 7A of Part II of our 2025 Form 10-K.
We are from time to time subject to various claims and lawsuits incidental to our business. Some of these claims may involve complex issues that are subject to substantial uncertainties. However, in the opinion of management, based on currently available information, we do not e…
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We are from time to time subject to various claims and lawsuits incidental to our business. Some of these claims may involve complex issues that are subject to substantial uncertainties. However, in the opinion of management, based on currently available information, we do not expect that any currently outstanding claims and lawsuits will, individually or in the aggregate, have a material adverse effect on our financial position, results of operations or cash flows.
Refer to Note 17, "Commitments and Contingencies" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding legal proceedings.
Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition and results of operations, and the trading price of our common stock. Please refer to our 2025 Form 10-K for information concerning r…
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Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition and results of operations, and the trading price of our common stock. Please refer to our 2025 Form 10-K for information concerning risks and uncertainties that could negatively impact us.