Source: Sharecast
In a brief statement, Michelin said it had seen year-on-year volume growth outside of North America during the third quarter, despite a "chaotic business context and…near-term uncertainties weighing on demand".
However, in North America, the business deteriorated more sharply than Michelin had expected, with volumes slumping nearly 10%.
In particular, the 136-year-old giant said there had been "plummeting" demand from original equipment manufacturers in truck and agriculture, a weak sell-out market in truck replacement and headwinds in business-to-consumer.
Tariffs, meanwhile, weighed on the margin, while free cash flow was dented by the weak dollar.
The US is Michelin’s most important market. It makes tyres locally, thereby avoiding tariffs on any imports.
However, Donald Trump’s swingeing tariff regime has led to weaker car sales, after automakers hiked prices in response. Consumer sentiment has also softened notably in the States.
As result, Michelin now expects full-year segment operating income to come in between €2.6bn and €3bn, down from its previous forecast for above €3.4bn.
Free cashflow was slated to range from €1.5bn and €1.8bn. Michelin had earlier predicted it would come in above €1.7bn.
In 2024, Michelin posted operating income of €3.4bn on sales of €27.2bn.
As at noon BST, shares in Michelin had lost 9%.
Jefferies, which has a ‘buy’ rating on the stock, said: "The key push-back has been that we are too early in the cycle. This has now been proven correct, with a much bigger cut than expected.
"That said, there is broad acknowledgment that the cyclical headwinds will shift to tailwinds, and we expect this to become louder - though investors will want to see the 2026 target cut first.
"We see an attractive cyclical recovery story with significant earnings upside over 24 months."
The Clermont-Ferrand-based group, which employs around 130,000 people in 63 countries, is due to publish third-quarter sales on 22 October.
