LKQ withdraws 2026 guidance as Europe drags Q3 revenue down 5.1%

LKQ Corporation (LKQ) said in an 8-K filed Oct. 29 that third-quarter 2026 revenue fell 5.1% to $3.32 billion, from $3.50 billion a year earlier. The results came with a net loss of $24 million, and the company had already withdrawn its full-year 2026 guidance on Oct. 23.

LKQ is a provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles, with operations in North America, Europe and Taiwan, the company said in its release.

Adjusted diluted earnings per share were 50 cents, against 84 cents a year earlier. The company’s net loss from continuing operations attributable to LKQ stockholders was $24 million, against net income of $178 million.

Here’s how the company did:

• Revenue: $3.32 billion vs. $3.50 billion a year earlier
• Adjusted diluted EPS: 50 cents vs. 84 cents a year earlier
• Net loss: $24 million vs. net income of $178 million a year earlier

Parts and services revenue fell 5.6%. Organic parts and services revenue fell 5.4%, foreign exchange subtracted 0.7%, and acquisitions and divestitures added 0.6%.

“LKQ remains a fundamentally strong enterprise, supported by its scale, leading positions across key markets, and global distribution platform,” said John Mendel, Chairman of the Board of LKQ. “At the same time, our recent financial and operating performance has not reflected the strength of the business or met the standards we expect, particularly in Europe.”

Segment results

Europe revenue was $1,451 million, against $1,615 million a year earlier. Segment EBITDA was $68 million, a 4.6% margin, against $162 million, or 10.0%.

North America revenue was $1,402 million, against $1,423 million. Its Segment EBITDA was $203 million, up from $199 million.

Specialty revenue was $465 million, up from $457 million. Its Segment EBITDA fell to $25 million from $34 million.

“The third quarter was characterized by weakness in our Europe segment, driven by operational issues related to the ERP implementation in Germany and volume declines in the United Kingdom and Benelux,” said Chief Financial Officer Rick Galloway of LKQ. “Specialty was modestly below plan. North America performed in line with expectations despite a softer demand environment.”

Costs and charges

The company recorded $111 million of pre-tax, non-cash impairment charges. Of that, $88 million was a goodwill impairment tied to the Specialty reporting unit.

The other $23 million was an impairment of net assets held for sale linked to the expected divestiture of LKQ’s operations in Romania, according to the filing.

Restructuring and transaction related expenses were $24 million, up from $14 million a year earlier.

Guidance and leadership

The company withdrew its full-year 2026 guidance, which it had last updated on July 30, 2026, according to the filing. The filing gives no replacement figures.

On Oct. 23 the board appointed Salvatore A. “Sal” Abbate as President and Chief Executive Officer, effective Dec. 15. The filing said he has more than three decades of experience leading large, complex distribution and industrial businesses.

The filing said he was chief executive of Veritiv Corporation, where its share price rose more than 13-fold during his tenure before its $2.6 billion sale to Clayton, Dubilier & Rice in 2023.

The board also suspended the strategic review, including the Specialty segment sales process, so the new leadership team can conduct a comprehensive assessment of the business, the company said.

Cash and capital returns

Operating cash flow was $411 million in the third quarter, and free cash flow was $372 million. For the nine months, operating cash flow was $466 million and free cash flow was $336 million.

Total debt was $3.7 billion at Sept. 30, and total leverage, as defined in the credit facility, was 2.8x EBITDA, or earnings before interest, taxes, depreciation and amortization.

In the quarter the company spent $30 million to repurchase 1.2 million shares and paid $76 million in cash dividends. About $1.5 billion remained on the buyback authorization at Sept. 30. On Oct. 25 the board extended the program through Oct. 25, 2028.

On Oct. 27 the board declared a quarterly cash dividend of 30 cents per share, payable Dec. 3 to stockholders of record at the close of business on Nov. 19.