TAICHUNG, Taiwan (BRAIN)—Giant executives are forecasting a generally flat year of growth in Europe and caution that sales in the U.S. could be hampered by excess inventory. On the other hand, Giant's first quarter report notes that e-bike sales in Europe, especially in the Netherlands, Germany and France, offer a bright spot in a generally downbeat report.
In releasing its first quarter report, the Taiwan manufacturer said its revenue dipped 1.4 percent to NT $14.35 billion ($441 million) when compared to the first quarter of 2015 when it reported revenue of NT$14.58 billion. Net income before taxes also dropped 9.1 percent to NT$1.08 billion when compared to NT$1.19 billion last year.
Giant, the world's largest manufacturer of bicycles, said 2016 will be a "challenging year." Giant faces what it considers a soft global economy, fluctuating foreign currency rates, high inventory levels and weak domestic demand in China.
As for the U.S. market, Giant said its inventory level is in good shape when compared to other major brands. Nevertheless, high inventory levels overall could affect its sales performance. "In terms of Giant's own brand business performance, Europe, Canada and the Australian markets have achieved satisfactory sales growth," the report said.
But China's rapidly slowing economy will impact the company's overall sales for the year. "Therefore Giant projects total sales for the group in 2016 will remain flattish," the report said.
"Despite the market challenges, Giant's focus in offering consumers innovative and value added products remain unchanged, and (Giant) will continue strengthening development of proprietary components and enhancing service level within the Giant distribution network," it said.
