Michelin’s North American Sales Drop on Slow Truck Demand
Sales in Q3 Slumped Close to 10%
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Michelin shares fell after the tire maker lowered its financial guidance for the year following a bigger-than-expected sales slump in North America.
The stock declined as much as 11% in Paris on Oct. 14, the steepest intraday drop in more than five years. It’s down around a fifth this year. Peer Continental AG also fell in Frankfurt.
The French company now sees operating income for this year in a range between 2.6 billion euros ($3 billion) to 3 billion euros at constant exchange rates, Michelin said late Oct. 13, compared with a previous target of more than 3.4 billion euros. The weaker dollar also contributed to the downgrade.
While the outlook cut was expected, it was “worse than feared,” Citi analyst Ross MacDonald wrote in a note. “Weak truck, agriculture and construction demand, trade down risks and tariff headwinds could persist into 2026.”
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Sales in North America slumped close to 10% during the third quarter, dragged down by slower demand for trucks and heavy-duty vehicles used in agriculture, Michelin said. U.S. tariffs also crimped margins, the company said.
U.S. tariffs have weakened demand for tires as logistics companies scale back truck purchases due to manufacturing cuts and slower freight activity. Shipments of tariff-hit goods such as steel and aluminum have fallen, and U.S. imports have dropped sharply since the tariffs were introduced, according to the Bureau of Economic Analysis.
Michelin said it has been operating in a “chaotic business context” that’s weighing on both consumers and trucking customers.
Michelin also reduced its 2025 outlook for free cash flow, which is now seen between 1.5 billion euros and 1.8 billion euros, compared to more than 1.7 billion euros previously.
Cie Generale des Etablissements Michelin SCA is due to report full third-quarter sales and more details on its reviewed full-year outlook on Oct. 22.
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