ERP disruptions in Europe weigh on results, but the dividend is maintained at $0.30 per share.

LKQ Corporation, one of North America’s largest replacement parts distributors, published disappointing second-quarter 2026 results. Revenue declined 3% to $3.4 billion US, while adjusted earnings per share of $0.67 came in below analyst expectations. Management lowered its 2026 earnings guidance.

ERP disruptions weigh on Europe

The primary driver of underperformance is the migration to a new enterprise resource planning (ERP) system in Europe, which caused significant disruptions to revenue and EBITDA in the European segment. Management confirmed that no additional ERP migrations are planned for the remainder of 2026 to allow for stabilization of the German market.

The Specialty division under review

LKQ is evaluating whether it is the “right long-term owner” of its Specialty division — a strategic review that could lead to a divestiture. The reduction of Taiwan trade tariffs (from 25% to 15%) provides a tailwind, though management expects these savings to be passed to customers to remain competitive. The dividend is maintained at $0.30 per share (ex-date: August 20, 2026). For Canadian distributors: LKQ and Keystone remain the primary suppliers of alternative parts.

Picture credit : LKQ Corporation