Klarna cuts full-year revenue and volume outlook on German retail weakness

Klarna, the Swedish buy now, pay later services provider and online bank, lowered its full-year outlook for both transaction volume and revenue on Tuesday. The company attributed the revision to weakening retail conditions in Germany, one of its key markets.

The guidance cut sent Klarna's shares down 17% in premarket trading, reflecting investor concern over the company's growth trajectory. The announcement signals that the German retail environment is putting pressure on consumer spending and installment-based payment volumes.

Klarna did not specify the magnitude of the forecast reduction in the announcement. The company had previously projected continued growth for the year but now sees headwinds from the German market.

Germany is a significant market for Klarna, which partners with retailers to offer point-of-sale financing to consumers. Weakness in that country's retail sector is now threatening the company's broader financial performance.