LKQ Ousts CEO Justin Jude, Withdraws Guidance and Warns of a Preliminary Third-Quarter Loss

LKQ said Friday, Oct. 23, that President and Chief Executive Justin Jude had departed effective immediately, that preliminary third-quarter results will show a net loss of $16 million to $32 million, and that it is withdrawing its full-year 2026 guidance.

The preliminary print missed expectations by a wide margin. Revenue was $3.32 billion, compared with $3.50 billion a year earlier, and parts and services organic revenue fell 5.4%. The company expects a net loss from continuing operations of $16 million to $32 million, including $111 million of non-cash impairment charges, compared with net income of $178 million a year earlier. On a per-share basis, the diluted loss is expected at $0.06 to $0.12, including $0.42 a share of the impairment charges, against diluted earnings of $0.69 a share a year earlier. Adjusted diluted earnings are expected at $0.47 to $0.53 a share, down from $0.84 a year earlier and below the 69 cents a share analysts polled by FactSet had expected — at the $0.50 midpoint, about 28% below that consensus on a TickerGrove calculation. Adjusted net income is expected at $119 million to $135 million, compared with $216 million.

Europe drove the shortfall, and the impairment sits in the print

Europe parts and services organic revenue fell 9.8%, and the Europe segment EBITDA margin is expected at 4.1% to 5.1%, compared with 10.0% a year earlier. The company blamed operational disruptions associated with the ERP implementation in Germany and volume declines in the United Kingdom and Benelux. The impairment charges split into $88 million of goodwill impairment and $23 million of impairment of net assets held for sale, per the reconciliation table in the release. North America performed in line with the company's expectations despite softer market conditions, and Specialty was modestly below expectations, which is why the story of the quarter is a European execution failure rather than a group-wide demand collapse.

Jude and the Europe chief are out; Abbate starts Dec. 15

Justin Jude ceased to serve as president and chief executive and resigned from the board, in each case effective Oct. 23, the company's Form 8-K said; he had held the top job since July 2024. Andy Hamilton is also departing effective today as president and managing director of LKQ Europe. Salvatore A. Abbate, 58, becomes president and chief executive — and joins the board — on Dec. 15. Abbate led a significant transformation of Veritiv as its chief executive: its share price rose more than 13-fold during his tenure, culminating in Veritiv's $2.6 billion sale to Clayton, Dubilier & Rice in 2023. Until Abbate starts, an interim Office of the Chief Executive Officer — Chairman John Mendel and Audit Committee Chair Sue Gove — will oversee the company's operations with its leadership team. The filing also sets Abbate's annual base salary at $1.34 million, with a $3.3 million sign-on cash award and a sign-on restricted stock grant valued at $12 million. “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,” Mendel said. The board has engaged Alvarez & Marsal to advise on European operations, with an initial focus on improving customer service levels, stabilizing operations and strengthening performance and cost discipline across the region.

Guidance is gone while the strategic review continues

Considering the third-quarter results in Europe and Abbate's appointment, LKQ is withdrawing its full-year 2026 guidance, which was most recently updated on July 30, 2026 — when it was cut — so investors now have no company outlook for the rest of the year. The actions announced Friday were taken in connection with the board's ongoing review of strategic alternatives, and the company said it will provide additional updates on that process as appropriate.

Shares were down 22% to $17.52 in early trading on Friday, Oct. 23, reaching levels not seen since April 2020. What to watch next is the full third-quarter report on Oct. 29 — whether the final figures land inside the preliminary ranges, what the Alvarez & Marsal mandate produces in Europe, and whether Abbate's arrival brings a new outlook or further strategic moves.