Shimano Inc. reported operating income decreased 22.3 percent in the first quarter as sales fell 12.3 percent.

Revenues reached ¥76,920 million, down from 87,714 million a year ago. Operating income was ¥12,658 million versus ¥16,285 million.

Ordinary income increased 61.8 percent to ¥23,340 million due to the recording of foreign exchange gains and other factors, and net income attributable to owners of the parent increased 95.6 percent to ¥19,663 million.

Bicycle Components
In Europe, aided by the mild winter since the beginning of the year, retail sales of completed bicycles, especially E-BIKE, had been strong, but sales declined sharply from the middle of March due to the impact of the novel coronavirus, and distributor inventories of bicycles in Europe increased rapidly.

In North America, retail unit sales of completed bicycles had been strong, supported by good weather, but then plummeted in March due to the spread of the novel coronavirus. This led to high levels of distributor inventories.

In China, retail sales were sluggish due to the spread of the novel coronavirus. Meanwhile, distributor inventories generally remained at an appropriate level. In South America, in the Brazilian market, retail sales were on a recovery trend after stagnating due to political instability, but retail sales rapidly slowed in late March due to the impact of the spread of the novel coronavirus. In the Argentine market, where currency depreciation continues, sales remained stagnant.

In the Japanese market, retail sales of community bicycles for commuting to work and school and middle- to high-end sports bicycles were weak throughout the period, but E-BIKE sales remained strong. Distributor inventories generally remained at appropriate levels. Under these market conditions, the Deore XT and SLX high-end MTB components, and GRX gravel adventure components were well received in the market. Also, the SHIMANO STEPS sport E-BIKE components were favorable.

As a result, net sales from this segment decreased 15.4 percent from the same period of the previous year to ¥58,868 million, and operating income decreased 26.1 percent to ¥10,298 million.

Fishing Tackle
In the Japanese market, retail sales were steady, as demand from families was stimulated by the warm winter and stable weather conditions from the start of the year, but consumer sentiment declined in March due to the impact of the novel coronavirus.

Overseas, in the North American market, sales had been strong since the end of the previous year, but sales then weakened almost instantaneously in March, as states ordered people to stay at home and enacted other restrictive measures in response to the spread of the novel coronavirus. In Europe, sales were strong at the start of the year in each key market, but in March sales declined significantly due to the impact of the novel coronavirus. In Asia, sales in China have been recovering as the turmoil caused by the novel coronavirus begins to abate, but sales in other countries were weak. In Australia, sales were sluggish throughout the period due to the damage caused by the bushfires and flooding, as well as the impact of the spread of the novel coronavirus.

Under these market conditions, sales in Japan increased compared to the previous year as sales of new products, including Metanium and Twin Power, as well as popular price range products, remained solid. Overseas, sales fell short of the previous year’s level, as the novel coronavirus had a significant impact.

As a result, net sales from this segment decreased 0.3 percent from the same period of the previous year to ¥17,976 million, and operating income increased 1.1 percent to ¥2,391 million.

Others
Net sales from this segment decreased 2.6 percent from the same period of the previous year to ¥75 million and an operating loss of ¥30 million was recorded, following an operating loss of ¥5 million for the same period of the previous year.

Forecast For Fiscal Year Ended December 31, 2020
Shimano withdrew its guidance for the year due to uncertainty created by the pandemic.

Shimano said, “Tthe global spread of the novel coronavirus disease is having a growing impact on economic activity in Japan and around the world. With respect to the business environment surrounding the Shimano Group, corporate activities have been impacted due to factors including partial stoppages of production activities at overseas production bases as well as in-store sales and movement restrictions enacted by governments in countries where the company’s products are sold.

“As the extent of these impacts remains uncertain, it is difficult for the company to reasonably calculate business performance forecasts at this time. As a result, the company has decided to temporarily withdraw the business performance forecasts announced on February 12, 2020, and leave them as undetermined. The company will once again announce business performance forecasts as soon as the situation allows.”

Photo courtesy Shimano