Feb 19 - LKQ Corp on Thursday forecast annual profit below Wall Street expectations, as weak demand for auto aftermarket parts and services weighs on its North American and European operations. Shares
LKQ Sees 2026 Profit Missing Estimates Amid Softer Auto Parts Demand
Earnings Outlook and Market Reaction
Feb 19 - LKQ Corp on Thursday forecast annual profit below Wall Street expectations, as weak demand for auto aftermarket parts and services weighs on its North American and European operations.
Premarket Shares Drop
Shares of the company fell more than 6% in premarket trading.
Tariff and Demand Headwinds
Auto parts suppliers are contending with broad tariff-related pressures that have slowed orders for aftermarket parts.
Restructuring Costs and Savings
On Thursday, the Chicago, Illinois-based company announced a restructuring plan that is expected to cost about $60 million to $70 million, and generate $50 million in annualized savings. More than half of the savings is anticipated to be realized in 2026, the company said.
Activist Investor Pressure
LKQ has come under pressure from activist investor Ananym Capital since October to sell its European unit and buy back shares. Ananym argued that pairing the European and North American businesses no longer offered strategic logic, according to a letter to LKQ's board seen by Reuters.
In January, LKQ said its board had begun reviewing strategic alternatives, including a possible sale.
Activist investors have increasingly targeted auto parts suppliers, pushing them to shed slower-growing businesses and boost shareholder returns.
Peer Moves: Genuine Parts
Peer Genuine Parts is also facing a push from activist investor Elliott Investment Management to streamline operations and improve margins.
Segment Performance: Europe vs North America
LKQ's organic revenue from parts and services fell 1.7% during the quarter, including a 4.8% slide in Europe.
LSEG Consensus Comparison
2026 EPS Guidance vs Estimates
The company expects 2026 adjusted profit between $2.90 per share and $3.20 per share, below analysts' estimates of $3.29 per share, according to data compiled by LSEG.
Quarterly Results Snapshot
Fourth-quarter adjusted profit was 59 cents per share, missing analysts' estimates of 65 cents per share.
Revenue Beats Forecasts
Revenue rose nearly 2.7% to $3.3 billion in the quarter, compared with estimates of $3.25 billion.
Reporting and Editing Credits
(Reporting by Apratim Sarkar in Bengaluru; Editing by Sahal Muhammed)
