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Shimano sales up 4.1% in the first half, but operating income declines

Published July 29, 2019
Company revises its forecasts down for remainder of the year.

OSAKA, Japan (BRAIN) — Shimano's net sales in its bicycle components division were up 4.1% in the first half of its fiscal year, which ended June 30. Operating income in the division decreased 3%, however.

Bike division sales in the half were 144 billion yen ($1.2 billion), up from 138 billion yen in the first half of last year. Operating income for the bike division was 29 million yen.

The company revised down its forecast for net sales and operating income for the second half, by 0.8% and 8.2% respectively. Shimano said it expects an increase in expenses for a new product launch in the half and increased costs of production and manufacturing improvement processes. The forecast is for all company divisions, including bikes and fishing. The company did not elaborate on the product launch. 

During the first half, net sales across the entire company were down 4.1%, to 182 billion yen. Companywide operating income was down 1.3% to 34 million yen.

The company gave its traditional overview of the world market for bicycle parts in its earnings announcement:

In Europe, good weather conditions from the beginning of spring supported favorable retail sales of completed bicycles, mainly sport E-BIKE, and distributor inventories of bicycles in Europe remained at an appropriate level.

In North America, although total retail unit sales of completed bicycles had been sluggish from the start of the year, the sales amount remained at the same level as the previous year due to improved weather from the latter half of March and also owing to a favorable sales environment, mainly for high-end bicycles. Distributor inventories remained at an appropriate level.

In China, retail sales of completed bicycles showed no clear signs of recovery, and sales continued to lack vigor. Meanwhile, distributor inventories remained at an appropriate level.

With regard to the other emerging markets, in South America, the Brazilian market continued to recover, while the Argentine market remained stagnant due to the effects of currency depreciation. Distributor inventories remained at an appropriate level except for the Argentine market.

In the Japanese market, despite overall good weather conditions, sales of high-end sports bicycles were sluggish. Meanwhile, as the shift to sports-type cross bike and E-BIKE for commuting to work and school further progressed, unit sales decreased, but sales unit prices increased. Distributor inventories were slightly high.

Topics associated with this article: Earnings/Financial Reports

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