LKQ CORP has recently released its latest 10-Q report. LKQ distributes replacement parts, components, and systems used in vehicle repair and maintenance, along with specialty aftermarket products and accessories. The company now reports through three operating segments — North America, Europe, and Specialty — after selling its Self Service business in 2025; it serves collision and mechanical repair shops, dealerships, and retail customers across the U.S., Canada, and multiple European countries.
In Item 2, management said the quarter was shaped by a mix of lower organic demand, foreign exchange effects, portfolio changes, and restructuring activity. LKQ said its revenue comes mainly from parts and services, with a smaller “other” category tied to scrap metal, precious metals from recycled parts, and aluminum products from salvage operations; it also said other revenue can swing with commodity prices and sales volume. The company said it continues to use organic revenue growth, Segment EBITDA, and free cash flow as its main performance measures, and that these figures are tied to incentive compensation.
For the three months ended June 30, 2026, total revenue was $3.408 billion, down from $3.513 billion a year earlier. Parts and services revenue fell $122 million to $3.305 billion, while other revenue rose $17 million to $103 million. Management attributed the decline in parts and services revenue to a $154 million drop in Europe, partly offset by increases of $23 million in Specialty and $9 million in North America. On an organic basis, parts and services revenue declined $174 million, or 5.1%, while foreign exchange added $34 million and acquisitions and divestitures added $17 million.
Gross margin was 38.8% in the quarter, up slightly from 38.6% a year earlier, but selling, general and administrative expenses rose to 29.0% of revenue from 27.3%. Operating income fell to 6.6% of revenue from 8.5%, and income from continuing operations before taxes dropped to 5.3% from 7.1%. Net income attributable to LKQ stockholders was 4.0% of revenue, down from 5.5% a year earlier.
For the first six months of 2026, revenue was $6.765 billion, compared with $6.909 billion in the same period of 2025. Gross margin was 38.6% versus 39.0%, while SG&A climbed to 28.9% of revenue from 27.9%. Operating income fell to 6.4% of revenue from 8.3%, and net income attributable to LKQ stockholders was 3.1% of revenue, down from 5.3% a year earlier.
LKQ said it completed the sale of its Self Service segment in 2025 and continued its ERP rollout in Europe, completing implementation in Germany in April 2026. It also said no triggering events or other indicators of impairment were identified during the quarter that required an interim goodwill impairment test. Following these announcements, the company's shares moved -14.19%, and are now trading at a price of $22.645. If you want to know more, read the company's complete 10-Q report here.
