STOCKHOLM (BRAIN) — MIPS reported third-quarter net sales decreased 39% year-over-year, citing reduced demand for bike helmets in its Sport category.
Net sales for the quarter were SEK 113 million ($9.9 million), compared with SEK 185 million at the same time last year. MIPS president and CEO Max Strandwitz said he expects this to be a short-term trend but could continue for the rest of the year and into the first part of 2023.
"Bike retailers around the world have generally built up too high inventory levels of bikes and bike accessories and therefore helmet manufacturers pulled the hand brake in terms of helmet manufacturing ahead of next season," Strandwitz said.
He said other Sport category helmets — including snow sports, equestrian, climbing, and hockey — have not experienced the same sales drop. MIPS' other major categories are Moto and Safety (which includes construction and industrial helmets).
"We believe that this sub-category (bike) will return to growth driven by strong trends in e-bikes, commuting and people wanting to spend more time outdoors," Strandwitz said. "We still see a high interest from our customers wanting to launch new products within the bike sub-category. Therefore, we are confident in our continued investments in bike."
Net income for the quarter fell 67% from SEK 88 million to SEK 29 million year-over-year, with earnings per share similarly dropping 67% from SEK 3.38 to SEK 1.10.
MIPS predicted a third-quarter revenue decrease last month, "when we realized that we had underestimated the speed and the magnitude of the slowdown in the bike sector," Strandwitz said. "... Despite the challenging environment, we see a good development in our other helmet categories. During the first nine months of the year, net sales have increased by 11%."
MIPS' corporate headquarters is in Stockholm, and its stock is traded on the Stockholm Stock Exchange under the MIPS symbol. Stock quote at Marketwatch.com.
