Just as in 2018, robust sales of components for e-bikes in Europe and strong sales of fishing products globally boosted Shimano's results for the first quarter of 2019. The company's net income soared from 1,091 million yen (€8.7m-$9.8m) in the first quarter of 2018 to ¥13,384 million (€107.5m-$119.9m) this quarter, helped by the positive impact of foreign currency exchange. Excluding currency adjustments and other comprehensive items, net income declined by 7 percent to ¥10,050 million (€80.7m-$90.0m).
Revenues improved by 3 percent to ¥87,714 million (€704.9m-$785.5m). In the bicycle components segment, Shimano's revenues rose by 2.4 percent to ¥69,603 million (€559.3m-$623.4m). Operating income declined by 5.6 percent to ¥13,926 million (€111.9m-$124.7m).
In Europe, retail sales of completed bicycles, mainly sport e-bike, remained solid as in the previous year, the company said, while in North America and China, retail sales of finished bicycles fell below average levels. As for other emerging markets, Southeast Asia as a whole still lacked vigor in the segment, although retail sales of complete bicycles showed signs of a gradual recovery in Indonesia. In South America, while retail sales in the Brazilian market continued to recover, the Argentine market remained stagnant due to the effects of currency depreciation. In Japan, despite good weather, sales of high-end sports bicycles were sluggish.
Shimano's fishing tackle segment scored a 7.0 percent increase in operating profit to ¥8,544 million (€68.3m-$77.0m) on 5.1 percent higher sales of ¥18,032 million (€144.9m-$161.5m). Most geographic areas fared well, apart from Europe, with sluggish sales in several countries and elevated distributor inventories. However, Shimano said inventories in the U.K. moved toward an appropriate level. North American sales were robust despite some unseasonable weather, while in Japan warm and stable weather drove traffic to retailers. China, South Korea and Southeast Asia performed well, thanks to the continued high popularity of sports fishing in the region.
In the Others segment, Shimano's sales decreased by 9.1 percent to ¥77million (€620,000-$690,000), leading to an operating loss of ¥107 million (€860,000-$960,000), up from an operating loss of ¥38 million for the same period in 2018.
The company's overall gross margin declined by 1.9 percentage points to 38.7 percent. For the full year 2019, Shimano maintained its sales forecast of ¥365 billion (€2.9bn-$3.2bn) in sales, up by 5 percent from last year, but lowered its net income guidance to ¥51.9 billion (€420m-$460m) from the ¥54 billion guidance provided with its year-end results, citing strengthening Asian currencies for the change.