Shimano Corp. said high bicycle inventories in the United States, unfavorable weather in Europe and stalled consumer spending on sport bikes in China contributed to significantly weaker results in the first half ended June 30 compared with a year earlier.

The results prompted the Japanese maker of bicycle components and fishing gear to lower its forecast for the full year.

Shimano reported total sales for the period of ¥166.4 billion ($1.54 bn), down 15.3 percent from a year earlier. Operating income declined 24.7 percent to ¥34.2 million ($317 mm), while ordinary income was off 36.3 percent to ¥31.6 million ($293 mm). Shimano reported net income of ¥22.9 million ($21 mm), a decline of 37.3 percent.

Bicycle Components

Net sales from this segment decreased 18.6 percent from the same period of the previous year to ¥132.6 billion yen, and operating income decreased 28.5 percent to ¥30.6 billion yen.

In Europe, bad weather in March and April greatly undermined retail sales of bicycles, resulting in a higher level of distributor inventories. In North America, retail sales of completed bicycles were somewhat weaker than in the same period of the previous year. Despite a subsequent slight improvement, distributor inventories of bicycles remain high.

In China, although distributor inventories that had persisted at a high level are heading to an appropriate level, there have been no signs of recovery in retail sales of sports bicycles that have been lackluster since the previous year.

As regards other major emerging markets, whereas retail sales of sports bicycles in Southeast Asia remained robust, those in South America continued to be soft because of the economic slowdown and weak currencies.

In the Japanese market, retail sales of sports bicycles, which had been robust until the previous year, lost momentum and distributor inventories have become somewhat high. Retail sales of community bicycles remained weak, continuing from the previous year.

Fishing Tackle

Net sales from this segment increased 0.6 percent from the same period of the previous year to ¥33.6 million, and operating income increased 37.2 percent to ¥3.66 billion yen.

The Japanese market got off to a flying start owing to stable weather from the beginning of the year with many opportunities to go fishing. Despite the temporary negative impact of the earthquake in Kumamoto in April on the fishing environment and the consumption trend, sales in Japan exceeded the level of the same period of the previous year. Overseas, sales in Asia remained robust, led by South Korea and Taiwan in the East Asian market. Sales in North America, Europe, and Australia did not fully recover from the dip in the first quarter.

Shimano’s adjusted forecast for the full year calls for net sales to decline 14.2 percent, operating income to fall 20.1 percent and net income to drop 37.7 percent.