On the back of a downturn previously reported for 2016, Shimano’s latest reported group net sales have continued a downward trajectory. In first quarter of fiscal year 2017, group net sales decreased 2.7% year on year to ¥79.9 billion (US$718.3 million).
Focusing on its bicycle business segment, in Europe, Shimano reported that Q1 2017 net sales from this segment decreased 0.9% year on year to ¥64.7 billion (US$581.4 million), and operating income decreased 3.2% to ¥14.0 billion (US$125.8 million).
The first quarter 2017 performance came on the back of a particularly poor first quarter in 2016. (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.)
So, even on the back of a weaker performance the first quarter of last year, Shimano was down 0.9% – indicating that underlying market and trading conditions are currently challenging.
Shimano noted that… ‘retail sales of completed bicycles were at the expected level for a typical first quarter partly due to the winter off-season. Distributor inventories of bicycles in Europe remained at an appropriate level. In North America, whereas retail sales of completed bicycles on the West Coast were sluggish because of many rainy days, those on the East Coast and inland exceeded the forecast because of a rather warm winter, and retail sales were robust overall.’
Shimano added that distributor inventories also remained at an appropriate level. In China, where retail sales had been lacklustre since 2015, retail sales slightly exceeded the level for the same period of the previous year and distributor inventories recovered to an appropriate level.
Turning to other emerging markets, Shimano noted that ‘retail sales in Southeast Asia continued to lack vigour just as the previous year, and those in Brazil, the largest market in South America, showed no signs of recovery.’
In the Japanese market, retail sales of both sports bicycles and community bicycles were sluggish, and distributor inventories were somewhat high.
On a more positive note, Shimano pointed to shipments of its flagship road bike component DURA-ACE Di2 (electronic shifting system) and the STePS E8000 drive unit for e-MTB, which is for the European market, began at the end of 2016 and these products were ‘well received in the market’.