Shimano Corp. reported sales rose 15.5 percent to ¥80.6 billion ($789 mm) in the second quarter ended June 30 as an improving economies in the U.S. and Europe overcame a late-quarter decline in manufacturing and an weaker-than expected early-quarter increase in Japan consumption in advance sales taxes that surged from 5 percent to 8 percent in the quarter.


 

The Japanese company reported sales at its Bicycle Components division increased 17.6 percent to ¥64.7 billion ($633 mm) in Q2, while sales in the Fishing Tackle division rose 7.4 percent to ¥15.9 billion ($155 mm). Gross profits reached ¥32.0 billion ($313 mm), or 39.7 percent of sales, up 330 basis points from the year-ago period. SG&A increased 13.4 percent to ¥15.8 billion ($155 mm), or 19.6 percent of sales, representing a 40 basis point improvement. Operating income increased 37.2 percent at Bicycle to ¥14.8 billion ($145 mm) and fell 97.5 percent at Fishing to ¥1.3 billion ($13 mm).


Net income reached ¥10.8 billion ($106 mm), up 6.7 percent from a year earlier.


 

In Europe first half sales of bike components remained “buoyant” despite a temporary decrease in sales owing to unsettled weather in May. U.S. sales were said to be flat for the first half on an “extremely harsh” winter. In Japan, sales of sports bicycles and mid-range and high-end community bikes were strong despite a severe winter. Sales of sports bicycles continued to grow strongly in China. Sales growth in other emerging markets were said to be robust as
well. Distributor and retailer inventories were reportedly low or in an appropriate range in all ranges.

 


Fishing Tackle sales in Japan in the first half recovered late in the half centered on basic products that got a lift from good weather in May and June. The growth came despite a temporary reluctance among consumers to purchase premium-priced products after the sales tax increase. First half sales were said to be “brisk” to retailers in Europe
and North America, as well as Oceania, on new product introductions.

 


Shimano ended the period with inventory valued at ¥28.5 billion ($281 mm), up 3.5 percent.

 


Shimano upped its full-year operating income forecast to ¥58 billion and net income to ¥41 billion, compared with forecasts of ¥48 billion and 33.5 billion, respectively issued in April. Revenue is now seen at ¥310 billion, compared to a full-year forecast of ¥287 billion when releasing first quarter results.