Giant Group reported its nine-month year-to-date (YTD) results and worsening trends in October top-line sales that cut into that trend even more. The Taiwanese bike brand said that although it saw strong growth from the China domestic market, the weak demand from the U.S. and Europe markets on the entry to mid-level products and the high inventories within the distribution network resulted in the decline in sales.
Consolidated sales were reported in Taiwan dollars at NT$62.1 billion for the YTD period through September, a decrease of 12.4 percent compared to the 2022 corresponding period. But the business worsened through Q3 as third-quarter revenues fell 24.6 percent year-over-year (YoY) to NT$19.52 billion and then worsened more in October as revenues for the month plunged 34.4 percent to NT$5.21 billion, pushing the October year-to-date period down 14.6 percent to NT$67.31 billion.
The company said the sharp decline in October was due to a reduction in orders placements from OEM customers.
In terms of non-operating income, the strong US$ performance helped to offset the interest expenses increase in the third quarter. Third quarter net income before tax came in at NT$1.51 billion, a decrease of 49 percent YoY, and net income after tax was NT1.10 billion, a decrease of 45 percent YoY. EPS was NT$2.81 in the third quarter.
Net income after tax for the nine-month YTD period came in at NT$3.12 billion, a decrease of 44.6 percent YoY, and EPS was NT$7.96 for the nine-month period.
Inventory reductions in both the U.S. and Europe markets were said to be slower than expected which affected sales performance for Giant’s OB sales in both the U.S. and Europe markets for the first three quarters, but China domestic sales saw close to 70 percent sales increase due to the increased popularity in cycling for recreation and fitness that started a huge cycling trend in China. China’s growth partially offset the sales decline in the U.S. and Europe.
Giant Group said it has been operating in the China market for over 30 years establishing sales and service integration from online to offline, activating social media marketing, and over 2,500 exclusive dealers organizing group rides that supported performance product sales which led to growth in both volume and ASP that strengthen its leading market position in China.
E-bike sales (OB+OE) for the first three quarters of the year contributed 32 percent of Giant Group sales. Although E-bike sales performance was said to be impacted due to the slowdown in consumer demand. Giant continues to project the mid- to long-term growth in the category.
From a short-term perspective, the company expects the bicycle industry to continue to face challenges with inventory reduction as well as the business risks arising from the global economy. However, demand for performance-level products in the U.S. and Europe remains strong and the cycling trend in China is expected to continue to support sales growth.
Photo courtesy Giant