Shimano Corp reported consolidated net sales reached ¥63.28 billion ($690m) first quarter ended March 31, up 1.3 percent from the same period the previous year.
Consolidated operating income decreased 9.4 percent to ¥9.75 billion ($106mm), ordinary income increased 9.7 percent to ¥11.1 billion ($121mm) and net income increase 9.3 percent to ¥7.65 billion ($83mm).
Sales of Bicycle Component increased 2.7 percent to ¥51.1 billion ($556mm) and operating income decreased 6.2 percent to ¥9.50 billion ($10.3mm), while sales from the Fishing Tackle segment decreased 3.9 percent from the same period of the previous year to ¥12.1 billion ($131mm) and operating income decreased 52.3 percent to 310 million ($3mm). Sales from other businesses decreased 24.0 percent to ¥83 million ($900,000) and an operating loss of ¥51 million was recorded, following an operating loss of ¥3 million ($555,000) for the same period of the previous year.
Bikes sales disappoint in Europe, as expected in United States
European bike sales In Europe, retail sales of bicycles remained lackluster owing to extremely cold weather in the period from January to March and the sluggish economy, despite high-growth segments such as e-bike (pedelecs) and mountain bikes with 29-inch wheels (29ers). Retail sales in the U.S. were less buoyant than in the previous year when the winter was mild, but were at the usual level for winter, despite uncertain economic prospects. In contrast, retail sales in Japan were sluggish because of the harsh winter.
Bicycle distributor inventories in Europe remained at an appropriate level, although inventories at retailers were somewhat high. Distributor inventories in the U.S. were also generally at an appropriate level, but inventories held by importers were rather high. Demand rose in China.
Fishing sales hurt by cold Japanese weather, Asian slowdown
In the Fishing Tackle segment, Japanese retail sales declined from the same period of the previous year. Sales were greatly affected by the bad weather in January and February that brought cold fronts, heavy snow and high winds. Retail sales started to pick up in March as the weather improved and became warmer compared to a typical year, creating favorable conditions for fishing.
New Shimano products, including new Metanium reels released in February and Stella SW reels released in March, were well received. On the other hand, for overseas, a challenging business environment persisted due to the impact of the European debt crisis and unsettled weather in both Europe and North America.
In Asia, the business environment also became harsh as China experienced an economic slowdown. In Oceania, despite concerns about the possible adverse impact of flooding and bushfires, brisk sales to retailers continued from the previous year.
Adjustments to 2013 forecast
Shimano now expects ordinary income of ¥22.0 billion ($240mm) and net income of ¥15.0 billion yen ($163mm) for the first half of 2013, compared with its Feb. 15 guidance of ¥21.0 billion and ¥14.5 billion. The company raised its forecast of full year ordinary income to ¥44.0 billion ($480mm) from ¥43.0 billion, but maintained its guidance on full year net income at ¥29.5 billion yen ($322mm).