LKQ Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported preliminary revenue of $3.32 billion for the third quarter of 2026, a decrease from $3.50 billion in the third quarter of 2025.
• Parts and services organic revenue declined 5.4% year-over-year.
• Reported a preliminary net loss of $16 million to $32 million, compared to net income of $178 million in the third quarter of 2025.
• Preliminary diluted loss per share ranged from $0.06 to $0.12, compared to diluted EPS of $0.69 in the third quarter of 2025.
• Preliminary adjusted diluted EPS ranged from $0.47 to $0.53, compared to $0.84 in the third quarter of 2025.
• Net loss included $111 million in non-cash impairment charges ($0.42 per share).
• The Europe segment experienced a 9.8% decline in parts and services organic revenue, with an EBITDA margin of 4.1% to 5.1%, down from 10.0% in the third quarter of 2025.
• Adjusted net income for the period is estimated between $119 million and $135 million, compared to $216 million in the third quarter of 2025.

Guidance and Future Outlook:

• Withdrew full-year 2026 guidance, which was last updated on July 30, 2026.
• Full third quarter results and a conference call are scheduled for October 29, 2026.
• The company is conducting an ongoing strategic review of alternatives and will provide updates as appropriate.

Business Segments and Product Lines:

• Significant underperformance occurred in the Europe segment, driven by operational disruptions from ERP implementation in Germany and volume declines in the United Kingdom and Benelux.
• The Specialty segment performed modestly below expectations.
• The North America segment performed in line with company expectations despite softer market conditions.
• The company is retaining Alvarez & Marsal to advise on European operations with an initial focus on improving customer service levels, stabilizing operations, and strengthening performance and cost discipline.

Market and Competitive Landscape:

• The press release notes softer market conditions in North America.
• No specific market share data or direct competitor comparisons were provided.

Risks and Challenges:

• Operational disruptions associated with ERP implementation in Germany.
• Volume declines in the United Kingdom and Benelux regions.
• Performance in Europe has fallen significantly short of the Board's expectations.
• Preliminary financial results are unaudited and subject to finalization, meaning actual results may vary materially.

Management Commentary and Tone:

• John Mendel, Chairman of the Board, stated that the Board is taking decisive action due to performance falling short of expectations and expressed strong conviction in the company's potential to create value.
• Salvatore A. Abbate has been appointed President and Chief Executive Officer, effective December 15, 2026, succeeding Justin Jude, who is departing immediately.
• An interim Office of the Chief Executive Officer has been established, consisting of John Mendel and Sue Gove, to ensure leadership continuity until Mr. Abbate assumes his role.
• Andy Hamilton is departing his role as President and Managing Director of LKQ Europe.

Other Key Points:

• The company announced leadership changes and operational actions intended to address recent performance and position the company for improved execution.
• The Board engaged Alvarez & Marsal to advise on European operations.
• The preliminary financial table details adjustments for amortization of acquired intangibles ($34 million), restructuring and transaction-related expenses ($24 million), impairment of goodwill ($88 million), impairment of net assets held for sale ($23 million), and direct impacts of the Ukraine/Russia conflict ($4 million).
• Weighted average diluted common shares outstanding for the period were 252.9 million.