OSAKA, Japan (BRAIN) — Shimano Inc. sales in its bicycle segment were down in the first nine months of 2020, but the company has revised up its full-year earnings and revenue projections due to greater use of bicycles globally during the COVID-19 pandemic.
Sales in the bike segment were down 3.8% in the first nine months of 2020, but the Japanese company still managed to increase its operating income by 4.9% during the period.
Shimano's sales in its bike division — which is 77% of its business — totaled 205 billion yen ($1.96 billion) in the first three quarters, down from 213 billion yen in the same period in 2019. The segment's income for the period was 44 billion yen, up from 42 billion yen last year.
Shimano revised up its forecast for the full fiscal year. It increased its net sales forecast by 5.7%, to 363 billion yen. Operating income was revised up 21%, to 68 billion yen.
Shimano said the revision was "based on factors including greater utilization of bicycles as an easy form of exercise and a mode of transportation with a low risk of infection, fishing garnering attention as a form of outdoor leisure with the rising popularity of fishing leading to greater demand, and the appreciation of Asian currencies during the third quarter of FY2020 resulting in a decrease in non-operating income."
Shimano, as is typical, offered little insight into the market conditions that led to the year to date numbers. Its full report on bike segment results was as follows:
"Amid restrictions on the activities of corporations and people due to the spread of COVID-19, global demand for bicycles began to rapidly increase from early spring, as cycling is an easy form of recreation and exercise, as well as a mode of transportation with a lower risk of infection. In addition, centering around Europe, subsidies to encourage the purchase of bicycles and policies to build infrastructure such as bike lanes have contributed to the cycling boom.
Under such circumstances, in overseas markets including that of Europe, North America and China, retail sales of bicycles and bicycle-related products recovered dramatically and were robust. As the inability of supply to keep up with the rapid increase in demand continued, each country saw trends of shortages in distributor inventories.
In the Japanese market, although there were no evident signs of a large cycling boom, as retail sales for cross bikes, used for recreation and as a mode of transportation, and for E-BIKE were solid, distributor inventories remained largely at appropriate levels.
Under these market conditions, the new Deore MTB components continued to be well-received in the market.
As a result, net sales from this segment decreased 3.8% from the same period of the previous year to 204,499 million yen, and operating income increased 4.9% to 44,131 million yen."
Across its business segments, Shimano net sales decreased 2% from the same period of the previous year to 264,174 million yen in the first three quarters. Operating income increased 7.7% to 54,300 million yen, ordinary income increased 5.7% to 58,678 million yen, and net income attributable to owners of parent increased 10.4% to 47,231 million yen.
