LKQ Stock Plunges 19% as CEO Departs, Guidance Pulled and Auto Parts Giant Warns of Loss After Europe Stumbles

NEW YORK — LKQ Corp. shares fell nearly 19% in early trading Friday. The auto parts distributor said its chief executive is leaving, withdrew its full-year forecast and warned of a third-quarter loss caused by problems in its European business.

The stock fell $4.25 to $18.22, trading on more than 2.6 million shares within the first half hour, close to its full three-month daily average. Before Friday's drop, the shares were already down about 27% over the past year.

The Chicago-based company said Justin Jude stepped down as CEO effective Friday. Salvatore A. Abbate will take over as president and CEO on Dec. 15. Until then, the company will be run by an interim office of the CEO made up of board Chairman John Mendel and Sue Gove, who chairs the audit committee.

LKQ also said Andy Hamilton, president and managing director of LKQ Europe, is leaving effective Friday.

"LKQ's performance, particularly in Europe, has fallen significantly short of the Board's expectations," Mendel said in a statement.

Preliminary loss

LKQ released preliminary, unaudited results a week before its scheduled Oct. 29 earnings report. The figures showed a sharp deterioration:

Revenue fell to $3.32 billion from $3.50 billion a year earlier. Organic revenue from parts and services fell 5.4%. The company expects a net loss from continuing operations of $16 million to $32 million, or 6 cents to 12 cents per share. A year earlier it earned $178 million, or 69 cents per share. Adjusted earnings are expected at 47 cents to 53 cents per share, down from 84 cents a year earlier.

The loss includes $111 million in non-cash impairment charges. Of that, $88 million is a goodwill write-down and $23 million relates to assets held for sale.

Europe at the center

LKQ blamed most of the shortfall on Europe. It cited disruption from a new enterprise resource planning system in Germany, along with lower sales volumes in the U.K. and the Benelux countries.

Organic revenue in European parts and services fell 9.8%. The segment's EBITDA margin is expected at 4.1% to 5.1%, less than half the 10% it reported a year ago.

The company said its Specialty segment came in modestly below expectations. North America performed in line with expectations despite softer market conditions.

The board has hired restructuring and advisory firm Alvarez & Marsal to help with European operations. The firm will first focus on customer service, operational stability and cost discipline in the region.

Guidance withdrawn

LKQ withdrew its full-year 2026 guidance, which it last updated July 30. It cited the European results and the leadership change.

The company said its board is continuing a review of strategic alternatives and will give updates as appropriate.

Despite the turmoil, Mendel said the board remains confident in the business.

"We have strong conviction in LKQ's business and its potential to create significant value for shareholders," he said.

He described Abbate as an experienced operator. "Sal is a proven operator with a track record of driving performance in complex distribution businesses," Mendel said.

A difficult stretch

LKQ is one of the largest distributors of replacement auto parts in North America and Europe. It supplies collision repair shops, mechanical repair shops and insurers with new aftermarket, recycled and remanufactured parts, and it runs salvage and specialty vehicle parts operations.

Europe has become a large part of the business since a string of acquisitions there, including Germany-based Stahlgruber. That makes problems in the region weigh heavily on overall results.

Large software overhauls are a common source of disruption for distribution companies, which depend on accurate inventory and fast order handling. Problems with a new ordering or warehouse system can quickly lead to missed deliveries and lost customers.

The stock had already been under pressure this year as U.S. repair demand softened. Fewer insurance claims and slower collision volumes have weighed on the aftermarket parts industry.

At around $18, the shares were near their lowest levels in years. LKQ's market value fell to about $4.6 billion.

Investors will look for more detail on Oct. 29, when the company releases full results and holds a call. Key questions will include how long the German disruption will last, what Alvarez & Marsal recommends, and whether the strategic review could lead to asset sales or a broader breakup.