Shimano has reported that overall group net sales declined 15.7% to ¥241.7 billion for the first nine months of 2016. As a result, basic earnings per share plummeted to ¥397.24 in the period, compared to ¥698.09 for the first nine months of 2015.
Citing bad weather in Europe and a weaker performance for bike retail sales in North America, Shimano reported a harder fall for its bike operating division. Here, net sales from Shimano’s bike segment decreased 18.8% year on year to ¥192.9 billion; and operating income decreased 29.4% to ¥43.2 billion. The company noted that, despite tough market conditions, segment net sales for the first nine months of fiscal year 2016 ‘achieved the initial target’.
Shimano noted that European bad weather in early spring greatly undermined retail sales of completed bicycles. This resulted in a continuing high level of distributor inventories. Although, ‘thanks to good weather from July onward sales picked up and became brisk, leading to a remarkable progress in the adjustment of distributor inventories.’
In North America, retail sales of completed bicycles remained somewhat weaker than in the same period of the previous year. However, Shimano noted that distributor inventories of bicycles were adjusted to a lower level than in the same period of the previous year.
Meanwhile, in the key market of China, ‘although distributor inventories that had persisted at a high level are returning to an appropriate level, there have been no signs of recovery in retail sales of sports bicycles that have been lacklustre since the previous year.’ Shimano pointed to bad weather in China, such as heavy rain, in various regions, as being among the factors curbing demand.
Turning to other major emerging markets, retail sales of sports bicycles in Southeast Asia, which had been robust, lost momentum in the period. Sales in South America continued to be soft because of the economic slowdown and weak currencies.
In the Japanese market… ‘retail sales of sports bicycles, which had been robust until the previous year, were sluggish and distributor inventories were somewhat high. Retail sales of community bicycles remained weak, continuing from the previous year.’
