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LKQ pulls 2026 guidance, names new CEO amid Europe slump

By Reuters News

Oct 23 (Reuters) - Automotive parts distributor LKQ Corp LKQ.O withdrew its annual guidance on Friday, citing weak performance in Europe, and said Salvatore Abbate would take over as its new chief executive in December, succeeding current CEO Justin Jude.

Shares of the company fell 17% in premarket trading following the announcement.

  • The withdrawal of its annual forecast comes after LKQ cut its 2026 outlook in July citing weak Europe demand

  • LKQ expects the region to be the biggest drag on its third-quarter results, due to be reported on October 29

  • Parts and services organic revenue in Europe is expected to fall 9.8% from a year earlier during the quarter, amid operational disruptions in Germany and softer demand across other key markets

  • In January, LKQ said its board had begun reviewing strategic alternatives, including a possible sale, after pressure from activist investor Ananym Capital to divest its European business and increase share repurchases

  • Activist investors have increasingly targeted auto parts suppliers, pressing them to divest slower-growing assets and ramp up share repurchases. Peer Genuine Parts said in February it would split into two companies after pressure from activist investor Elliott Investment Management

  • Newly appointed CEO Abbate previously served as chief executive of Veritiv Corp, a packaging and distribution company acquired by Clayton, Dubilier & Rice in 2023

  • LKQ expects third-quarter adjusted profit to be between 47 cents and 53 cents per share, well below analysts' estimate of 69 cents, according to data compiled by LSEG

  • It expects quarterly revenue at $3.32 billion, compared with estimates of $3.41 billion

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