LKQ Tumbles after Europe Slump Hits Earnings, Forces Leadership Shakeup

LKQ Corp (NASDAQ:LKQ) shares plummeted Friday after the company reported weak preliminary third-quarter results and withdrew its full-year 2026 guidance.

LKQ’s preliminary third-quarter update showed weaker earnings and revenue, with Europe driving the shortfall and prompting management and operational changes.

Preliminary Q3 Results Show Sharp Earnings Decline

LKQ expects third-quarter revenue of $3.32 billion, down from $3.50 billion a year earlier and below Wall Street’s $3.41 billion estimate. Parts and services organic revenue declined 5.4%.

Adjusted diluted EPS is expected to be between 47 and 53 cents, below the 69-cent analyst estimate and down from 84 cents a year earlier.

The company expects a net loss attributable to LKQ stockholders from continuing operations of $16 million to $32 million, compared with net income of $178 million last year. Results include $111 million of non-cash impairment charges.

Diluted loss per share is expected between 6 cents and 12 cents, including 42 cents per share of impairment charges.

Europe Weakness Triggers Guidance Withdrawal

Europe drove most of the shortfall. Parts and services organic revenue in the region declined 9.8%, while segment EBITDA margin fell to an expected 4.1% to 5.1% from 10.0% last year.

LKQ attributed the weakness to ERP-related disruptions in Germany and lower volumes in the U.K. and Benelux.

Specialty performed modestly below expectations, while North America met the company’s expectations despite softer market conditions.

“LKQ’s performance, particularly in Europe, has fallen significantly short of the Board’s expectations, and the Board is taking decisive action to address it,” Chairman John Mendel said.

LKQ withdrew its full-year 2026 guidance, last updated July 30, citing the European performance and upcoming CEO transition.

Leadership and Operational Changes

LKQ appointed Salvatore A. Abbate as president and CEO, effective Dec. 15, replacing Justin Jude. Until then, Mendel and Audit Committee Chair Sue Gove will lead an interim office of the CEO.

Andy Hamilton is also leaving LKQ Europe, while Alvarez and Marsal will advise on improving customer service, operational stability, performance and cost discipline in the region.

LKQ said the actions are part of its ongoing review of strategic alternatives.

Analysts See Upside Despite Earnings Reset

LKQ is scheduled to report earnings on Oct. 29.

Wall Street expects EPS of 69 cents, compared with 84 cents a year earlier, on revenue of $3.41 billion versus $3.45 billion last year.

The stock carries a Buy consensus rating with an average price target of $29.50.

Recent analyst actions include JPMorgan maintaining an Overweight rating while lowering its price forecast to $27 from $30 on Oct. 8. Barclays maintained an Equal-Weight rating and cut its forecast to $25 on Aug. 3.

LKQ has declined 40.94% over the past 12 months and is trading near its 52-week low.

LKQ Stock Price Activity: LKQ shares were down 20.49% at $17.87 at the time of publication on Friday, according to Benzinga Pro data.

LKQ-Photo by Casimiro PT via Shutterstock