Boosted by healthy cycling gains in the U.S. and Europe, Shimano Inc. reported revenues in the first quarter climbed 29.5 percent to ¥98.0 billion ($823 mm).
Operating income jumped 63.0 percent to ¥23.2 billion ($195 mm) while net income increased 104.8 percent to ¥20.4 billion ($171 mm).
Sales from the Bicycle Components segment increased 34.2 percent to ¥81.9 billion ($688 mm), and operating income leapt 65.1 percent to ¥22.0 billion ($185 mm). In Europe and North America, Shimano said that as a result of “growing interest in the use of bicycles in society, retail sales in the first quarter were brisk. As a result, distributor inventories remained slightly lower than the appropriate level.”
In Japan, sales of sports bicycles continued to be robust, but sales of community bicycles were weak, due large to the impact of price increases resulting from the depreciation of the yen, and distributor inventories of community bicycles remained somewhat high. While sports bicycles in emerging markets continued to grow robustly, sales of sports bicycles in China, which had been the leading driver of demand for sports bicycles, were flat with year ago levels.
“In these market conditions, against a backdrop of rising expectations in view of promising market trends going forward, order-taking was brisk,” said Shimano. “In addition, Shimano products remained relatively affordable because of the entrenched depreciation of the yen. Thus, segment sales for the first quarter exceeded the forecast.”
At Shimano's Fishing Tackle segment, sales increased 9.9 percent from the same period of the previous year to ¥16.0 billion ($134 mm), and operating income advanced 34.1 percent to ¥1.20 billion ($10 mm).
The Japanese market got off to a sluggish start because anglers had fewer opportunities to go fishing due to heavier snow falls than in a typical year and rough weather from the New Year onward, Shimano said. The company also was comping against a spike in sales a year earlier as Japanese consumer rushed to buy products ahead of an increase in the country's sales tax.
Overseas, despite a slowdown in Eastern Europe, sales in Europe as a whole, including Western Europe, increased. Sales in North America increased, reflecting numerous pre-orders received mainly from major customers partly because concerns about the economy abated. Sales in Oceania, including New Zealand, were robust thanks in part to good weather.
Given the strong quarter, Shimano raised its forecast for the year. It now expects sales of ¥357 billion, operating income of ¥76.5 billion, and net income of ¥59.0 billion for the full year. Previously, it expected sales of ¥355 billion, operating income of ¥73.5 million, and net income of ¥53 million.
