# LKQ (LKQ): Warns of Q3 loss as Europe stumbles, pulls 2026 outlook and replaces CEO

> LKQ, which supplies repair and replacement parts for cars and trucks, said on 23 October that it expects a third-quarter loss of $16m to $32m after a…

- URL: https://centiview.com/post/lkq-lkq-warns-of-q3-loss-as-europe-stumbles-pulls-2026-outlook-and-replaces-ceo
- Published: 2026-10-27T09:25:00.000Z
- Sectors: Consumer & Retail
- Region: US
- Ticker: LKQ
- Sentiment (opinion, not a recommendation): bearish
- Publisher: Centiview (Persie Ltd, London)
- General information only, not financial advice

LKQ, which supplies repair and replacement parts for cars and trucks, said on 23 October that it expects a third-quarter loss of $16m to $32m after a weak showing in Europe. It also withdrew its 2026 forecast and replaced its chief executive.

## What happened

On Friday 23 October 2026 LKQ Corporation, a Nasdaq-listed distributor of recycled and aftermarket car parts with operations in North America, Europe and Taiwan, published preliminary, unaudited figures for the quarter ended 30 September 2026. The figures came six days before its planned full results on 29 October. It said sales were $3.32bn, against $3.50bn a year earlier, and that it expects a net loss from continuing operations of $16m to $32m, including $111m of non-cash impairment charges (write-downs of the book value of assets, which do not use up cash). Chief executive Justin Jude left the company the same day. Salvatore Abbate, formerly chief executive of the packaging and paper distributor Veritiv, takes over on 15 December 2026. Until then an interim Office of the Chief Executive, made up of chairman John Mendel and audit committee chair Sue Gove, runs the company. The head of LKQ Europe, Andy Hamilton, also left. The board hired the advisory firm Alvarez & Marsal to help with European operations, and withdrew its full-year 2026 forecast, last updated on 30 July.

## The numbers, explained

Start with sales. $3.32bn against $3.50bn is a fall of $0.18bn, or about 5.1% (0.18 / 3.50), though both figures are rounded. Organic revenue from parts and services, which strips out currency moves and the effect of buying or selling businesses, fell 5.4%. In Europe it fell 9.8%. The Europe segment's EBITDA margin, earnings before interest, tax, depreciation and amortisation as a share of sales, is expected at 4.1% to 5.1%, against 10.0% a year ago. That is a drop of 4.9 to 5.9 percentage points, so Europe kept roughly half or less of the profit per dollar of sales that it did a year earlier. LKQ blamed disruption from a new enterprise resource planning (ERP) system in Germany, the software that runs ordering, stock and invoicing, and lower volumes in the UK and Benelux. North America was in line with its expectations and Specialty, its accessories business, was modestly below them.

Now profit. Under GAAP, the standard US accounting rules, net income from continuing operations was $178m in the third quarter of 2025 and is now expected to be a loss of $16m to $32m. That is a swing of $194m to $210m (178 + 16 and 178 + 32). Diluted loss per share, profit per share with all possible new shares counted, is expected at $0.06 to $0.12 against earnings of $0.69. The $111m of write-downs is $88m of goodwill, the premium paid for past acquisitions, and $23m on assets held for sale; the company says they cost $0.42 per share after tax. Adjusted figures, which the company defines itself and which leave out items such as write-downs, restructuring and amortisation of acquired intangibles, look better but still fall. Adjusted profit per share is expected at $0.47 to $0.53 against $0.84, down 37% to 44% (0.31 / 0.84 and 0.37 / 0.84). Adjusted net income is $119m to $135m against $216m, down 38% to 45%.

## Why it matters

LKQ makes its money by buying, recycling and selling parts that repair shops and insurers use to fix vehicles, so its results reflect how many cars are being repaired and how well its own supply chain works. This update is notable because the problem looks self-inflicted rather than a market-wide slump: the company points to its German software rollout, not a collapse in demand. The warning also follows a July cut. On 30 July LKQ lowered its 2026 adjusted profit-per-share forecast from $2.90 to $3.20 down to $2.60 to $2.90, citing a slower-than-expected recovery in Europe after the ERP change. Third-quarter adjusted profit per share of $0.47 to $0.53 compares with $0.67 in the second quarter. The July release also showed total debt of $4.0bn and leverage of 2.8 times EBITDA at 30 June, which is a measure of how many years of earnings it would take to repay the debt; that is the latest figure we can verify, not a third-quarter one. Independent reporting by IBTimes says the shares fell nearly 19% in early trading on 23 October, $4.25 to $18.22, leaving a market value of about $4.6bn (252.9m diluted shares x $18.22 = $4.61bn).

There is a second thread. In January 2026 the board began a review of strategic alternatives, including a possible sale of the whole company, after announcing in December 2025 a process to explore selling its Specialty segment. The 30 July release said the review had no deadline and no assurance of any deal. The 23 October release says the board will give updates "as appropriate" and does not report any bid. The new chief executive's package is set out in the SEC filing: a $1.34m base salary, a $3.3m sign-on cash award and $12m of sign-on restricted stock units, which are shares that vest over time. For readers new to this, the point is that the board changed leaders and brought in outside advisers before the full results, which suggests it saw the European shortfall as serious. That is our reading, not a statement by the company, and the filing says the board is acting because performance "has fallen significantly short" of its expectations.

## What to watch next

LKQ will publish its full third-quarter results and hold a conference call on 29 October 2026, which will replace these preliminary ranges with final figures and may add detail on cash flow, debt and the Europe recovery plan. Mr Abbate takes over as chief executive on 15 December 2026. The company has withdrawn its 2026 forecast, so there is currently no company forecast for the full year to compare with. The strategic review is still open, with no date for any conclusion. Any updates would come through LKQ press releases and SEC filings. We make no prediction about the results or the outcome of the review.

- ERP: enterprise resource planning, the software that runs ordering, stock and invoicing
- Impairment: a non-cash write-down of the recorded value of an asset
- Organic revenue: sales growth excluding currency moves and acquisitions or sales of businesses
- Adjusted profit: profit after removing items the company chooses to exclude, such as write-downs

> **Why it matters** LKQ expects a third-quarter loss of $16m to $32m against a $178m profit a year ago, mainly because of problems in Europe, and has withdrawn its 2026 forecast and replaced its chief executive.

> **What we verified** Sales $3.32bn vs $3.50bn, organic -5.4%, Europe organic -9.8%, Europe margin 4.1% to 5.1% vs 10.0%, net loss $16m to $32m, $111m impairments, EPS and adjusted EPS ranges, 29 October results date, leadership changes, withdrawn outlook: LKQ Form 8-K and press release exhibit (SEC, primary). Sales, loss, adjusted EPS, Europe figures, impairment split and the share move also match IBTimes; the July forecast and Q2 figures come from LKQ's Q2 press release (SEC, primary). Percentage changes are our own calculations from rounded company figures.

### Sources
- [LKQ preliminary Q3 2026 results press release, Form 8-K Exhibit 99.1 (SEC, primary)](https://www.sec.gov/Archives/edgar/data/0001065696/000106569626000047/exhibit991-q326earningsand.htm)
- [LKQ Form 8-K, CEO change and Abbate offer letter (SEC, primary)](https://www.sec.gov/Archives/edgar/data/0001065696/000106569626000047/lkq-20261021.htm)
- [LKQ second quarter 2026 results and outlook, Form 8-K Exhibit 99.1 (SEC, primary)](https://www.sec.gov/Archives/edgar/data/0001065696/000106569626000041/exhibit991.htm)
- [LKQ Stock Plunges 19% as CEO Departs, Guidance Pulled and Auto Parts Giant Warns of Loss After Europe Stumbles (IBTimes)](https://www.ibtimes.com.au/lkq-shares-plunge-ceo-departure-european-loss-1877300)