LKQ Pulls 2026 Outlook, Parts Ways With CEO And Europe Chief After A Weak Third Quarter

LKQ, which distributes replacement and specialty parts for cars and other vehicles, withdrew its full-year 2026 guidance on Friday after Europe badly missed the board's expectations, according to an 8-K filing. CEO Justin Jude left the company the same day, and the company said it expects a preliminary third-quarter net loss of $16 million to $32 million.

A quarter dragged down by Europe

LKQ expects third-quarter revenue of $3.32 billion, against $3.50 billion a year earlier. The preliminary, unaudited loss includes $111 million of non-cash impairment charges, compared with net income of $178 million in the third quarter of 2025.

Diluted loss per share from continuing operations attributable to LKQ stockholders is projected at $0.06 to $0.12, including $0.42 per share of impairment charges, versus earnings of $0.69 a year ago. Adjusted earnings per share are expected at $0.47 to $0.53, against $0.84.

Europe drove the miss. Parts and services organic revenue there fell 9.8%, and segment EBITDA margin is expected at 4.1% to 5.1%, compared with 10.0% a year earlier. The company cited disruptions from an ERP software rollout in Germany and volume declines in the United Kingdom and Benelux. Specialty was modestly below expectations, while North America performed in line despite softer markets. Company-wide parts and services organic revenue declined 5.4%.

LKQ will report full third-quarter results on October 29 and hold a conference call.

Leadership shake-up, with an interim gap

Salvatore Abbate, 58, becomes president and CEO on December 15. He previously led Veritiv, whose share price rose more than 13-fold during his tenure before its $2.6 billion sale to Clayton, Dubilier & Rice in 2023, the company said. He sits on the board of ArcBest.

Until then an interim Office of the CEO, made up of Chairman John Mendel and Audit Committee Chair Sue Gove, will oversee operations. CFO Rick Galloway serves as principal executive officer for SEC purposes. Andy Hamilton also left as head of LKQ Europe, and the board hired Alvarez & Marsal to advise on European operations, starting with customer service, stabilizing operations and cost discipline.

"LKQ's performance, particularly in Europe, has fallen significantly short of the Board's expectations," Mendel said. Jude and Hamilton are eligible for the payments due on a termination without cause under the company's severance policy.

Abbate's pay package

Abbate's offer letter sets a $1.34 million base salary, a target cash bonus of 150% of salary and a $3.3 million sign-on cash award, repayable if he is fired for cause or quits without good reason before December 15, 2027. He is also eligible for $12 million of sign-on restricted stock units vesting over three years from March 1, 2027, plus a 2027 performance-stock grant with an $8 million target value.

The moves come as the board continues its review of strategic alternatives, and the company said it will give further updates as appropriate. Withdrawn guidance had last been updated on July 30.

Full third-quarter results and the conference call come October 29; Abbate takes the CEO seat on December 15.

Sources

• 8-K Filing — LKQ CORP (LKQ) — SEC EDGAR
• Exhibit exhibit991-q326earningsand.htm — LKQ CORP 8-K exhibit — SEC EDGAR
• Exhibit exhibit992-ceoappointment.htm — LKQ CORP 8-K exhibit — SEC EDGAR
• LKQ Corporation Announces Preliminary Third Quarter 2026 — globenewswire.com
• LKQ Corporation Appoints Salvatore A. Abbate as President — globenewswire.com