U.S. dealers aggressively de-stock Stellantis(STLA.US) Q3 revenue drops 27%
1min read Stellantis(STLA.US) said it is taking steps to address inventory buildup and poor business performance, which led to the company's downgraded 2024 forecast last month, as its third-quarter revenue fell 27%, according to Zhitong Finance.
Stellantis reported third-quarter revenue of 33 billion euros ($35.8 billion), down 27% from a year ago, topping analysts' estimates of 31.1 billion euros. Total shipments were 1.148 million units, down 279,000 units, or 20%, from a year ago.
"Inventory reductions in the U.S. are happening faster than expected," new CFO Doug Ostermann said on a call, adding that he expects U.S. dealer inventories to be 100,000 units lower than the target date of November 30.
Ostermann, who oversaw Stellantis's business in China, took over from Natalie Knight this month as part of a management shake-up aimed at correcting strategic missteps, especially in North America.
Stellantis said total inventory as of Sept. 30 was 1.33 million, down 129,000 from a year ago. In the U.S., total dealer inventory fell by more than 80,000 units from June 30 to Oct. 30.
The updated full-year guidance for the year ending Sept. 30 was confirmed, and the company said it would still launch about 20 new models in 2024.
Stellantis previously said it was lowering its expectations for positive free cash flow, now expecting to burn between 5 billion and 10 billion euros ($5.58 billion-$11.7 billion) this year. The company also lowered its operating margin guidance, expecting an adjusted operating margin of 5.5%-7.0% this year, mainly due to its decision to accelerate the normalization of inventory levels in the U.S.
