Shimano Inc. reported earnings rose 13.2 percent in the first quarter on a 6.7 percent revenue gain.
Sales reached ¥85.2 billion, up from ¥79.9 billion a year ago. Net earnings rose to ¥10.79 billion from ¥9.5 billion. Operating income rose 10.9 percent to ¥16.9 billion.
In the Bicycle Components, sales increased 5.1 percent from the same period of the previous year to ¥68 billion, and operating income increased 5.5 percent to ¥14.8 billion.
Shimano said in the company’s statement, “In Europe, while retail sales of completed bicycles, mainly E-BIKE, stayed in a robust situation since the second half of the previous year, distributor inventories of bicycles remained at an appropriate level. In North America, although retail sales of completed bicycles were sluggish at the beginning of the year, distributor inventories maintained 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, although distributor inventories remained at an appropriate level. With regard to the other emerging markets, retail sales of completed bicycles in Southeast Asia showed signs of recovery, but still lacked vigor. Retail sales of completed bicycles in South America maintained recovery from the second half of the previous year, particularly in Brazil and Argentina. Distributor inventories were at an appropriate level both in Southeast Asia and South America.
“In the Japanese market, retail sales of both sports bicycles and community bicycles were lackluster, partly due to unstable weather, such as heavy snowfalls. Distributor inventories remained at a slightly high level, though they were in an appropriate range. Under these market conditions, the SHIMANO STEPS E8000 drive unit for E-MTB, the DI2 (electronic shifting system) version and the disc brakes of the ULTEGRA road bike components were well received in the market since the previous year.”
In the Fishing Tackle segment, net sales increased 13.2 percent from the same period of the previous year to ¥17. 2 billion, and operating income increased 65.8 percent to ¥2.2 billion.
Regarding the Fishing Tackle segment, Shimano’s release stated, “In the Japanese market, retailers’ New Year sales were strong, but sales were weak thereafter due to cold weather and heavy snowfalls. Overseas, sales in Europe were stagnant due to cold weather and other factors and distributor inventories increased in the major markets of Germany and the U.K. In the North American market, sales remained robust, supported by the firm economy.
“In Asia, sales in China, South Korea and Southeast Asian markets continued to be robust, led by sports fishing, though sales in Taiwan were stagnant. In Australia, sales were stagnant partly due to cyclones that hit the country in March. Under these market conditions, in Japan, new products like the STELLA and the Bantam were well-received in the market. As a result, sales in Japan exceeded the previous year’s level. Overseas, although sales in Australia fell below the previous year’s level due to the cyclones, overseas sales on the whole exceeded the previous year’s level because sales in Europe, North America and Asia exceeded the previous year’s level.”
In the Others segment, net sales decreased 9.1 percent from the same period of the previous year to ¥85 million and an operating loss of ¥38 million was recorded, following an operating loss of ¥63 million for the same period of the previous year.
Looking ahead, Shimano said the company’s forecasts of income have been revised because non-operating expenses were recorded in the first quarter, owing to the depreciation of the U.S. dollar against major Asian currencies.
Net income for 2018 is now expected to reach ¥46 billion versus guidance of ¥47.2 billion previously. In 2017, net earnings were ¥38.4 billion. Shimano continues to expect sales to reach ¥350 billion for the year against ¥335.8 billion in 2017.