TOKYO (BRAIN) — Shimano has revised its full-year forecasts due to a discrepancy between its second quarter results and the results it forecast for that period. The company also said a proposed settlement to a U.S. class action lawsuit over its crank recall is "reasonable."
The company said its net sales in the quarter were ahead of expectations in part due to favorable weather in Europe. However, increased operating and non-operating costs, including foreign exchange costs due to a weak U.S. dollar relative to Asian currencies. The costs reduced operating income, ordinary income and net income in the period. The company said it also anticipates "continuation of inventory adjustments in the Chinese market, leading to expected drop in profit margin due to an increase in expenses in a phase of production adjustments at factories."
The bottom lines?
- Shimano lowered its 2025 net sales forecast by 2.1%, to 460,000 million yen, down from 470,000 million yen (still above its 2024 results of 451,000 million yen).
- It lowered its operating income forecast by 34.3%, to 46,000 million yen, down from 70,000 million yen.
- It lowered its ordinary income forecast by 44.1%, to 49,300 million yen, down from 88,250 million yen.
- It lowered its basic earnings per share from 722.68 yen to 347.97 yen.
First half sales were up 12%, the company announced last week.
Shimano also released a statement about a proposed settlement to a class action lawsuit filed by several owners of Shimano cranks over the company's handling of an inspection program and recall. The settlement calls for Shimano to provide retailers with more tools to assess whether cranks should be replaced, to extend the consumer warranty on the relevant cranks, and to pay each of 14 plaintiffs a $500 "service award," among other terms.
On July 30, the court granted a preliminary approval of the settlement, with final approval expected next year.
"Because the final approval has not yet been obtained, we refrain from disclosing the specific terms of the settlement. However, we consider the terms to be reasonable," the company said.
