OSAKA, Japan (BRAIN) — Shimano's first-quarter net income in its bike division fell 16.8% from last year, while its operating income in the segment was down 31.8%. After issuing a negative forecast for the full-year performance at the end of its fiscal year, Shimano again revised its forecasts for ordinary income and net income for the first half of this year, and its forecast for net sales for the full fiscal year.
In its bike segment, net sales were 98,298 million yen ($730 million) in the quarter
The company said it is optimistic about the long-term prospects of the bike market, but current conditions are unfavorable.
"Although the strong interest in bicycles cooled as progress was made toward recovery to pre-COVID-19 day-to-day routines, interest in bicycles continued as a long-term trend. On the other hand, concerns about economic recession, including rapidly rising inflation, led to a slowdown in sales of completed bicycles, and market inventories generally remained high, despite ongoing supply and demand adjustments," the company said, adding:
"Overseas, in the European market, interest in bicycles continued to be high, and retail sales of completed bicycles, especially e-bikes, was solid. Market inventories generally remained at high levels, although some high-end models were in short supply.
"In the North American market, sales remained weak and market inventories were at a consistently high level.
"In the Asian and South and Central American markets, although interest in bicycles was firm, sales remained somewhat sluggish due to cooling consumer confidence on account of currency depreciation and rising inflation. However, in the Chinese market, sales remained strong, especially for road bikes, owing to the growing momentum of outdoor sports cycling.
"In the Japanese market, the soaring price of completed bicycles due to yen depreciation and other factors slowed the pace of sales and market inventories remained somewhat high.
"Under these market conditions, the Shimano Group provided products to the market, including the new product SHIMANO 105 that is a high-end model for road bikes, and sport e-bike components, SHIMANO STEPS series."
Company-wide, sales were down 12.5% to 126,071 million yen. Operating income decreased 26.4% to 28,009 million yen, ordinary income decreased 27.4% to 28,596 million yen and net income decreased 29.7% to 20,203 million yen. For the first half, Shimano is now forecasting ordinary income of 53,700 million yen, down 2 billion yen or 3.6% from its previous forecast. For the full year, Shimano revised its net sales forecast to 460,000 million yen, down 8% from its previous forecast. Full-year net sales of 460,000 million yen would be down 27% from its 2022 full-year sales of 628,909 million yen. It's forecasting net income for the year of 69,500 million yen, a further 19.7% down from its previous forecast and 46% below its 2022 net income.
In Shimano's fishing division, net sales decreased by 1.4% to 103 million yen. The fishing division recorded a loss of 12 million yen for the quarter.
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Shimano company-wide revenue and operating income by quarter.
