LKQ Corporation, the parent company of Keystone Automotive and its NTP-STAG RV distribution division, today reported first quarter 2026 financial results.
“We are operating in a challenging environment and are focused on improving our results,” said President and CEO Justin Jude. “Our teams are taking deliberate actions to reduce costs, streamline operations while taking market share, and position ourselves for success going forward as the environment improves. In North America, our business held up well in the quarter with above market growth, and we’re starting to see signs of recovery in the market. In Europe, we saw continual improvements through the quarter, and we’re continuing to work on integration. In early April, we took a large step forward with an ERP migration in a major market that is part of our overall operational improvement initiatives. But there is more work to do. We are operating with urgency and focused on execution, improving our customer relationships and strengthening the business to create value for our shareholders.”
First Quarter 2026 Financial and Operating Results
Revenue for the first quarter of 2026 was $3,469 million, an increase of 4.3% compared to $3,327 million for the first quarter of 2025. Total parts and services revenue increased 3.6%, which included a 5.1% increase from foreign exchange rates year over year, a 1.6% decrease in parts and services organic revenue, and the net impact of acquisitions and divestitures, which increased revenue by 0.2%.
Net income was $77 million compared to $158 million for the same period of 2025. Diluted earnings per share was $0.30 compared to $0.61 for the same period of 2025, a decrease of 50.8%. Net income2 for the three months ended March 31, 2026 included a $44 million (or $0.17) impairment of our equity method investment in Mekonomen.
On an adjusted basis, net income was $171 million compared to $193 million for the same period of 2025. Adjusted diluted earnings per share was $0.67 compared to $0.74 for the same period of 2025, a decrease of 9.5%.
Strategic Initiatives
On Jan. 26, the company announced that the Board of Directors initiated a comprehensive review of strategic alternatives to enhance shareholder value. The company has retained BofA Securities and Goldman Sachs & Co. LLC. as its financial advisors. The review has no deadline or definitive timetable and there can be no assurance the review will result in any transaction or other strategic outcome. The company will provide updates on the process as appropriate.
Cash Flow and Balance Sheet
Cash flow from operations3 and free cash flow1,3 were negative $56 million and negative $96 million, respectively, for the first quarter of 2026. As of March 31, 2026, the balance sheet reflected total debt of $3.9 billion and total leverage, as defined in our credit facility, was 2.6x EBITDA.
Returning Capital to Shareholders
During the first quarter of 2026, the Company distributed $77 million in cash dividends. On April 28, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on June 4 to stockholders of record at the close of business on May 21.
2026 Outlook
“We are seeing improving performance trends across our global footprint, with continued strength in North America and early signs of stabilization in Europe. We are continuing to implement productivity and restructuring initiatives intended to help mitigate the impact of ongoing macroeconomic and cost pressures. Based on our performance to date, we remain focused on executing against our full year 2026 outlook,” said Rick Galloway, senior vice president and chief financial officer.
For 2026, management reaffirmed the outlook as set forth below:
| 2026 Previous Full Year Outlook | 2026 Updated Full Year Outlook | |
| Organic revenue growth for parts and services | (0.5%) to 1.5% | Unchanged |
| Diluted EPS2 | $2.35 to $2.65 | $2.16 to $2.46 |
| Adjusted diluted EPS1,2 | $2.90 to $3.20 | Unchanged |
| Operating cash flow3 | $900 to $1,100 million | Unchanged |
| Free cash flow1,3 | $700 to $850 million | Unchanged |
