Shimano Corp., which is one of the world’s two largest suppliers of bicycle components, reported sales reached ¥133.1 billion ($1.40 billion) in the first half ended June 30, up 7.7 percent from the first half of 2012.
Sales by the company’s Bicycle Components division increased 8.3 percent to ¥106.1 billion ($1.11 bn), while sales by the Fishing Tackle division rose 5.9 percent to ¥26.8 billion ($281 mm). Gross profits reached ¥48.2 billion ($506 mm), or 36.2 percent of sales, down 150 basis points from the year earlier period. SG&A increased to ¥27.0 billion ($283 mm), or 20.3 percent of sales, up 20 basis points. Operating income declined 0.2 percent at Bicycle to ¥20.3 billion ($213 mm) and fell 37.9 percent at Fishing to ¥991 billion ($10 mm).
Consodliated net income reached ¥17.8 billion ($187 mm), up 16.6 percent from a year earlier.
Shimano ended the period with inventory valued at ¥27.6 billion ($289 mm), up 19.1 percent. Inventories of finished bicycles remained slightly elevated in both Europe and North America at the end of the period, while inventories of components were at appropriate levels.
In Europe, sales at the bike components were stifled by the stagnant economy, a cold, harsh winter and unusually cold and wet spring. Unfavorable weather also suppressed sales in Japan while sales began improving in the United States with the arrival of warm weather in May.
Sales of Fishing Tackle finally began to pick up in Japan, but remained sluggish in Europe and North America due to an unusually long winter that kept conditions cold deep into the second quarter. Despite concerns about a slowdown of the Chinese economy, sales to retailers in Southeast Asia remained strong.
Shimano lowered its earnings forecast for the full year to operating income of ¥43 billion and net income of ¥31 billion, compared with forecasts of ¥44 billion and 29.5 billion respectively issued in April. The company expects slow to no growth in Europe, moderate growth in the United States and robust growth in Japan, where the weak yen has triggered an export boom that has spurred both personal and business spending.