LKQ Withdraws 2026 Guidance After Europe Miss

The Tip Desk · October 24, 2026 · 3 min read

The auto-parts distributor expects a third-quarter net loss of $16 million to $32 million and Europe EBITDA margin of 4.1% to 5.1%.

LKQ Corporation (LKQ), a provider of alternative and specialty auto parts, said preliminary third-quarter results would show a swing to a net loss and withdrew full-year 2026 guidance after a sharp miss in Europe.

The company expects revenue of $3.32 billion for the three months ended September 30, 2026, compared with $3.50 billion a year earlier. Parts and services organic revenue is expected to decline 5.4%. It expects a net loss of $16 million to $32 million, including $111 million of non-cash impairment charges, versus net income of $178 million in the third quarter of 2025. Diluted loss per share is expected at $0.06 to $0.12, including $0.42 a share of non-cash impairment charges, versus diluted earnings of $0.69 a share a year earlier. Adjusted diluted earnings are expected at $0.47 to $0.53 a share, versus $0.84.

The company said the quarter primarily reflected underperformance in the Europe segment, including operational disruptions associated with the ERP implementation in Germany and volume declines in the United Kingdom and Benelux. Europe parts and services organic revenue is expected to decline 9.8%. Europe segment EBITDA margin is expected at 4.1% to 5.1%, compared with 10.0% a year earlier. Specialty was modestly below expectations, the company said, and North America performed in line with its expectations despite softer market conditions.

That Europe result followed a second quarter in which the company already said the region fell short of expectations because of the German ERP rollout. Second-quarter 2026 revenue was $3.4 billion, down 3.0% from $3.5 billion a year earlier, with parts and services organic revenue down 5.1%. Net income was $134 million versus $185 million a year earlier, and adjusted diluted earnings were $0.67 a share versus $0.84. North America had returned to positive organic growth for the first time in nine quarters in that period.

Considering the third-quarter Europe results and the appointment of a new chief executive, LKQ is withdrawing full-year 2026 guidance, which had been most recently updated on July 30, 2026.

The board appointed Salvatore A. Abbate as President and Chief Executive Officer, effective December 15, 2026. He succeeds Justin Jude, who is departing effective October 23, 2026. Andy Hamilton is also departing his role as President and Managing Director of LKQ Europe. Until Abbate takes the role, the company established an interim Office of the Chief Executive Officer consisting of Chairman John Mendel and Audit Committee Chair Sue Gove.

The board engaged Alvarez & Marsal to advise on European operations, with an initial focus on improving customer service levels, stabilizing operations and strengthening performance and cost discipline across the region. Chairman John Mendel said LKQ’s performance, particularly in Europe, had fallen significantly short of the board’s expectations and that the board was taking decisive action.

The company said Abbate brings more than three decades of experience leading large, complex distribution and industrial businesses. As chief executive of Veritiv Corporation, he led a transformation that included a $2.6 billion sale to Clayton, Dubilier & Rice in 2023. He currently serves on the board of ArcBest.

In connection with the board’s ongoing review of strategic alternatives, the company said it has taken several actions, including the Abbate appointment, leadership changes in Europe and the retention of Alvarez & Marsal. It said it will provide additional updates regarding the strategic alternatives process as appropriate. Full third-quarter results are scheduled for October 29, 2026.