Home / Business and Economy / LKQ's Q2 Miss: Germany ERP Blamed for Sales Drop
LKQ's Q2 Miss: Germany ERP Blamed for Sales Drop
1 Aug
Summary
- LKQ reported $3.41 billion in Q2 revenue, missing expectations by 3%.
- A new ERP system implementation in Germany caused significant service issues.
- Full-year adjusted EPS guidance was lowered by 9.8% due to European challenges.
Automotive parts company LKQ reported a disappointing second quarter for CY2026, with revenue declining 3% year-on-year to $3.41 billion, falling short of market expectations. Non-GAAP earnings per share also missed analyst consensus by 6%. The company's adjusted EBITDA and operating margin saw a decline compared to the previous year.
Management identified operational disruptions stemming from a new enterprise resource planning (ERP) system implementation in Germany as the main driver for the underperformance. CEO Justin Jude acknowledged considerable service issues and revenue loss in Europe, although North American segments demonstrated positive organic growth for the first time in nine quarters.
Consequently, LKQ has lowered its full-year adjusted EPS guidance by 9.8% at the midpoint. The revised outlook anticipates only modest improvements in European operations for the remainder of the year, with a focus on restoring service levels in Germany and maintaining cost discipline. No further ERP rollouts are planned for the remainder of CY2026.
