The LKQ Corporation is reporting that it generated higher revenues but lower earnings in the first quarter of 2026 as growth was offset by margin pressure and non-cash charges.
“We are operating in a challenging environment and are focused on improving our results,” said Justin Jude, president and CEO, in a press release. “Our teams are taking deliberate actions to reduce costs, streamline operations and position ourselves for success going forward.”
The Tennessee-based distributor of aftermarket, recycled and remanufactured automotive parts, including collision components and paint and body products, posted revenue of US$3.47 billion for the quarter ended March 31, up 4.3% from US$3.33 billion a year earlier.
Net income from continuing operations fell to US$77 million, compared with US$158 million in the same period last year. Diluted earnings per share declined to US$0.30 from US$0.61.
The quarter included a US$44 million impairment related to an equity method investment, which weighed on reported results.
On an adjusted basis, net income totalled US$171 million, down from US$193 million a year earlier, while adjusted diluted earnings per share decreased to US$0.67 from US$0.74.
Rick Galloway, senior vice-president and chief financial officer, said the company is seeing “improving performance trends across our global footprint.”
Operating cash flow was negative US$56 million and free cash flow was negative US$96 million for the quarter, reflecting seasonal patterns.
The company ended the quarter with total debt of approximately US$3.9 billion and a leverage ratio of 2.6 times EBITDA.
LKQ maintained its full-year outlook, expecting adjusted diluted earnings per share in the range of US$2.90 to US$3.20.
