Shimano said its sales for the first quarter were down by 12.3 percent from the year-ago period to ¥76,920 million (€662.5m-$721.1m), hampered by lockdowns around the world in response to Covid-19. However, the company’s net earnings jumped by 95.6 percent to ¥19,663 million (€169.4m-$184.3m), mainly due to strong foreign exchange gains and a favorable comparison base with the year-ago quarter, when the company had faced a charge of ¥2,359 million (€20.3m-$22.1m).
The gross margin inched up by 0.2 percentage points to 38.9 percent and the operating income dropped by 22.3 percent to ¥12,658 million (€109.0m-$118.7m).
In the bicycle components segment, Shimano’s revenues fell by 15.4 percent to ¥58,858 million (€507.0m-$551.9m) and operating earnings tumbled by 26.1 percent to ¥10,298 million (€88.7m-$96.6m).
Discussing the market situation for bicycles, the group said that sales of bicycles, especially e-bikes, were strong during the period in Europe, supported by the mild winter weather. However, sales declined sharply from the middle of March due to the impact of coronavirus, while distributors’ inventories increased rapidly. The same pattern was seen in North America.
In China, bike sales were sluggish due to Covid-19, but distributor inventories generally remained at an appropriate level. In the Brazilian market, sales were tending toward recovering after stagnating due to political instability, but they slowed in late March as more restrictions were imposed. In the Argentina, where the currency’s depreciation continues, sales remained stagnant.
In Japan, sales of community bicycles for commuting to work and school were weak. The same happened with medium to high-end sports bicycles, but e-bikes performed well.
Shimano’s Deore XT and SLX high-end MTB components and its GRX gravel adventure components stood out. The Shimano Steps components for sport e-bikes also did well.
The group’s fishing tackle segment fared better, with sales inching down by only 0.3 percent to ¥17,976 million (€154.9m-$168.6m), and operating income increasing by 1.1 percent to ¥2,391 million (€20.6m-$22.4m).
The company said that retail sales of fishing products increased in Japan, as demand from families was stimulated by a warm winter and stable weather conditions from the start of the year, but consumer sentiment declined in March as the virus outbreak started to spread. The company said that sales of new Shimano products in this segment, such as Metanium and Twin Power, remained solid.
Overseas, sales were robust in Europe and the Americas until March, when governments ordered people to stay at home. Sales in China have been recovering as the turmoil caused by coronavirus begen to abate. In Australia, sales were sluggish throughout the period due to the damage caused by the bushfires and flooding, as well as Covid-19.
In the Others segment, Shimano’s sales were down by 2.6 percent to ¥75 million (€600,000-$700,000). The operating loss in this segment expanded to ¥30 million (€260,000-$280,000) from ¥5 million.
The company decided not to release any full-year guidance due to the current uncertainty.
