Shimano Inc. reported earnings decline 6.9 percent in the first quarter ended March 31 as sales gained 2.9 percent. Operating earnings declines at Bicycle Components segment offset gains in the Fishing Tackle segment.
Revenues rose to ¥87.7 billion from ¥85.2 billion a year ago. Net income fell to ¥10.1 billion from ¥10.8 billion a year ago. Operating income slid 3.8 percent to ¥16.3 billion.
In the Bicycle Components segment, net sales from this segment increased 2.4 percent from the same period of the previous year to ¥69.6 billion, and operating income decreased 5.6 percent to ¥13.9 billion.
Shimano said of the Bicycle Components segment, “In Europe, retail sales of completed bicycles, mainly sport E-Bike, remained solid in continuation from the previous year, and distributor inventories of bicycles in Europe remained at an appropriate level. In North America, although total retail unit sales of completed bicycles were sluggish, the sales amount remained at the same level as the previous year due to relatively strong sales of high-end bicycles. Distributor inventories remained at an appropriate level. In China, retail sales of completed bicycles showed no signs of recovery, and retail sales of low-end and middle-range bicycles continued to be sluggish. Meanwhile, distributor inventories remained at an appropriate level.
“With regard to the other emerging markets, retail sales in Southeast Asia continued to lack vigor. Meanwhile, in South America, while retail sales in the Brazilian market continued to recover, the Argentine market remained stagnant due to the effects of currency depreciation. Distributor inventories remained at an appropriate level except for the Argentine market. In the Japanese market, despite good weather conditions, sales of high-end sports bicycles were sluggish.
“Meanwhile, as the shift to sports-type cross bike and E-Bike for commuting to work and school further progressed, unit sales decreased, but sales unit prices increased. Distributor inventories were slightly high. Under these market conditions, the Shimano 105 Series, which is one of the high-end road bike components, and the Shimano Steps sport E-Bike components, were well received in the market in continuation from the previous year.”
In the Fishing Tackle segment, net sales increased 5.1 percent from the same period of the previous year to ¥18.0 billion, and operating income increased 7.0 percent to ¥2.4 billion.
Shimano said about the Fishing Tackle segment, “In the Japanese market, sales remained solid as the warm and stable weather conditions from the start of the year led to an increase in the number of visitors to retailers. Overseas, in the North American market, sales were solid as the firm economy provided support despite some impacts from unseasonable weather. In Europe, although sales were sluggish in some countries on the continent, where distributor inventories seem excessive, distributor inventories in the UK moved towards an appropriate level.
“In Asia, sales in China, South Korea, and Southeast Asia were robust thanks to the continued high popularity of sports fishing. In Australia, sales remained solid, as there were no major cyclone disasters like there were in the previous year. Under these market conditions, sales in Japan increased compared to the previous year as sales of high-end products, including new products, remained robust. Overseas, sales, on the whole, exceeded the previous year’s level, as the Stella SW and other new products were well received.”
Regarding its outlook, Shimano kept its guidance for sales and operating income but lowered it slightly for net income. Revenues are expected to reach ¥365 billion, up 4.9 percent. Operating income is expected to amount to ¥73 billion, up 11.1 percent. Net income is now expected to decline 3.8 percent to ¥51.9 billion. Previous guidance had called for net income to reach ¥54 billion, up 0.1 percent.
Photo courtesy Shimano
