Michelin (EU:ML) shares tumbled more than 9% on Tuesday after the French tire manufacturer issued a significant profit warning for 2025, blaming deteriorating market conditions, particularly in North America.
The company cut its Segment Operating Income (SOI) forecast to a range of €2.6 billion to €3.0 billion at constant exchange rates — a sharp drop from its previous guidance of more than €3.4 billion. It also lowered its outlook for free cash flow before mergers and acquisitions to between €1.5 billion and €1.8 billion, down from the earlier projection of above €1.7 billion.
The downgrade followed a nearly 10% year-on-year drop in third-quarter sales volume in North America. Michelin cited “plummeting demand” from truck and agriculture equipment manufacturers, weaker replacement truck tire sales linked to economic softness, and additional pressure on consumer demand.
“The current business environment is chaotic with near-term uncertainties weighing on demand,” Michelin’s management said, pointing to challenges across both B2B and B2C segments.
While other regions reported year-on-year volume growth in the third quarter, tariffs have weighed on the company’s global competitiveness. A weaker-than-expected U.S. dollar further reduced free cash flow.
Analysts at Barclays said that although they had expected a profit warning, “the magnitude came far above our expectations and those of even the most bearish investors.” The bank lowered its 2025 estimates for Michelin’s sales, SOI, and free cash flow by 1%, 9%, and 5% respectively.
Michelin is scheduled to provide further details on its third-quarter performance and updated 2025 outlook during a conference call on October 22, 2025.
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