For the first quarter of 2016, accessories specialist Shimano Group has reported an overall 16.2% decrease in net sales to ¥82.2 billion – combining all operating activities. Operating income decreased 30.7% to ¥16.1 billion, and ordinary income decreased 61.5% to ¥10.5 billion.
For its bike business segment, Shimano’s net sales for the first quarter of fiscal year 2016 decreased 20.3% year on year to ¥65.3 billion, and operating income decreased 34.4% to ¥14.5 billion.
Following the impact of the depreciation of the US dollar in the first quarter of fiscal year 2016, and the recording of non-operating expenses, Shimano has revised its net income and ordinary income forecasts downwards for the full year of 2016.
Net income is now expected to reach ¥53.4 billion in 2016. This is down from the original forecast of ¥58 billion. Ordinary income is forecast at ¥74.5 billion, down from an original ¥80 billion.
The company’s forecast for net sales and operating income, however, remained in line with its original forecast.
Shimano noted that both Europe and North America had a mild winter and retail sales in the first quarter of fiscal year 2016 were buoyant. Distributor inventories of bicycles in Europe remained at an appropriate level. In North America, Shimano added that distributor inventories, which have been accumulating relatively high, are likely to adjust to appropriate levels within the first half of fiscal year 2016.
In China, where growth in retail sales of sports bicycles slowed in the previous year, distributor inventories remained high, but ‘adjustment to an appropriate level is gradually underway’. As regards other emerging markets, whereas retail sales in Southeast Asia remained robust, those in South America were lacklustre because of the economic slowdown and weak currencies.
In the Japanese market, although sales of sports bicycles maintained more or less the same level, distributor inventories were somewhat high. Retail sales of community bicycles remained weak, affected by the impact of price increases resulting from the depreciation of the yen since 2015.
In analysis of its operations, Shimano stated…. ‘During the first quarter of fiscal year 2016, frequent terrorist attacks in Europe raised concerns about a possible decline in tourists from overseas and cooling of consumer sentiment, resulting in greater uncertainty concerning the economic outlook.
‘In the US, while the decrease in manufacturing output which had continued from the previous year halted and the employed population steadily increased, personal consumption showed signs of diminished vigor due to unstable energy prices. In Japan, in line with the slowing of overseas economies and appreciation of the yen since the end of the previous year, exports and production became sluggish and personal consumption weakened, with the Japanese economy continuing to be in a lull amid mounting concern about flagging momentum.’
