Michelin (EU:ML) said Wednesday that its first-quarter 2026 performance is expected to start the year on a weak footing, with tyre shipments declining, pricing turning negative and currency pressures continuing to weigh on results.
The French tyre manufacturer reported that sell-in volumes dropped in the “low-to-mid single digit” percentage range during the first quarter. This decline came despite easier year-on-year comparisons, suggesting that demand remains subdued across several core segments, including passenger and light truck tyres, commercial vehicles and the company’s Beyond Road agricultural division in North America.
Michelin noted that replacement tyre demand showed some stability, with the consumer segment returning to “modest growth.” However, this improvement was not enough to counterbalance softer conditions in other parts of the business.
Pricing, which supported earnings in 2025 with a positive contribution of about 3%, moved into negative territory during the quarter. The shift reflects contract indexation mechanisms that automatically adjust prices in line with declining raw material costs, as well as limited scope to pass on U.S. tariff-related expenses in an increasingly competitive market environment.
Product mix remains a partial positive factor, supported by stronger demand for premium Michelin-branded tyres and larger formats measuring 18 inches and above.
Foreign exchange movements continue to create headwinds. Michelin said currency pressure in the quarter was “comparable to” that experienced in the fourth quarter of 2025, when FX effects reduced revenue by €346 million, or 4.9% of net sales. The company noted that a one-cent movement in the dollar-euro exchange rate has an impact of roughly €30 million on operating income.
Management did not provide additional detail on how the Middle East conflict might affect operations, saying that no supply shortages have been observed so far but that the situation continues to be monitored closely.
Further information on input cost trends — including raw materials, energy and freight — will be released together with first-quarter sales results on April 29.
Michelin reaffirmed its full-year volume outlook, expecting a gradual improvement through 2026. Sell-in volumes are projected to become “slightly positive” in the second quarter and improve more noticeably in the second half, with the company targeting modest growth for the full year.
Analysts at Barclays, which rates Michelin “underweight” with a €25 price target compared with a previous closing price of €29.22, said the update was “consistent with recent communication” but warned that the combination of weaker volumes, price-mix pressure and foreign exchange effects represents a triple headwind that is unlikely to ease before the middle of the year.
Shares in the company were up 4.7% at 10:07 GMT.
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