LKQ (LKQ) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Mon, May 4, 2026 astatine 9:59 AM CDT 29 min read

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DATE

Thursday, April 30, 2026 astatine 8 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Justin Jude

• Chief Financial Officer — Rick Galloway

Full Conference Call Transcript

Justin Jude: Thank you, Joe, and bully morning, everyone. We admit you joining america today. Q1 was different 4th of coagulated advancement crossed our operating segments, and we're progressively assured successful our positioning arsenic North America continues to recover. This 4th reflected the team's operating subject and relentless absorption connected the things wrong our control, taking marketplace share, protecting margins and improving productivity. LKQ has started 2026 with a beardown foundation, featuring a much focused organization, disciplined execution and an unwavering committedness to semipermanent worth creation. Now I'll supply a little update connected each segment, highlighting request trends, commercialized execution and the actions we're taking to grow profitability.

North America integrated gross declined 0.5% connected a per time basis, an betterment implicit past year's diminution of 4.1% and a sequential betterment from Q4's diminution of 1%. These results item a gradual betterment and reenforce our assurance successful the absorption of our North American operations. Comparable claims were down astir 2% to 4%, demonstrating dependable betterment from the levels we saw passim 2025. Importantly, we achieved beardown show successful our aftermarket collision merchandise line, surpassing the maturation levels of the segment. This affirmative momentum was partially driven by an summation successful utilization of alternate parts, which reached a grounds precocious of astir 40% done February, and we expect that this favorable inclination continues successful March arsenic well.

We besides renewed respective MSO agreements and further integrating ordering capabilities with our cardinal partners. These integrations are designed to summation the easiness and velocity of ordering, improved procurement workflows and presumption america to seizure much stock of wallet. Elitek, our calibration and diagnostic concern delivered beardown integrated maturation and steadfast EBITDA margins successful the quarter. For context, an expanding stock of collision repairs necessitate calibration and diagnostics. And we estimation that request has risen to astir 75% contiguous from astir 62%, 3 years ago. We presumption this arsenic a durable, semipermanent tailwind, and a compelling accidental to widen our work offering. Our bumper to bumper hard parts concern successful Canada again delivered affirmative growth.

And arsenic I mentioned successful the past, we program to methodically grow this concern further, fixed the inactive fragmented do-it-for-me hard parts marketplace crossed North America. We're seeing promising signs of stabilization successful North America that reenforce our optimism for the business. Used car prices are climbing, noncomprehensive full nonaccomplishment rates are declining, car security premiums are easing, each affirmative indicators for our industry. Notably, utilized car values improved each period this quarter, with March unsocial up 6.2%. These trends volition thrust a simplification successful full nonaccomplishment frequence and boost the proportionality of accidents that construe into repairable claims, supporting continued maturation and accidental for our company.