Shimano has lowered its full year outlook slightly after lower-than-expected sales and earnings for the six months to July 29. The company's net income declined by 10.6 percent from the year-ago period to 24,800 million yen (€204.7m-$228.4m) on 4.1 percent sales of ¥181,900 million (€1.5bn-$1.7bn).
For the full year 2019, Shimano now expects sales of ¥362 billion (€3.0bn-$3.3bn), versus previous guidance of ¥365 billion. Net income is expected to be ¥49.3 billion (€407.0m-$454.1m), against previous guidance of ¥51.9 billion.
In the bicycle components segment, Shimano's revenues rose by 4.1 percent to ¥143,600 million (€1.2bn-$1.3bn) in the first half, while operating income declined by 3.0 percent to ¥28,600 million (€236.1m-$263.4m). Analyzing the market situation in Europe, Shimano said that good weather conditions from the start of spring supported retail sales of complete bicycles, mainly sport e-bikes.
In North America, although total unit sales of complete bicycles had been sluggish from the start of the year at retail, sales remained flat due to improved weather from the latter half of March as well as a favorable business environment, mainly for high-end bicycles. In China, retail sales of complete bicycles showed no clear signs of recovery, and sales continued to lack vigor.
Looking at other emerging markets, Shimano said that the Brazilian market continued to recover, while the Argentinean market remained stagnant due to the currency's depreciation. In the Japanese market, despite overall good weather, sales of high-end sports bicycles were sluggish, but the shift to sports-type cross bikes and e-bikes for commuting progressed further.
Shimano's fishing tackle segment scored an 8.0 percent increase in operating profit to ¥5,470 million (€45.2m-$50.4m) on 4.2 percent higher sales of ¥38,200 million (€315.3m-$351.8m). In Japan, sales remained solid as the warm and stable weather from the start of the year continued, leading to an increase in retail traffic. Overseas, in the North American market, fishing tackle sales were solid, while in Europe, although sales were mostly sluggish, the U.K. market picked up pace. In the rest of Asia, particularly in China, sales were strong thanks to the continued high popularity of sports fishing. In Australia, good overall weather led higher sales, mainly at mass retailers.
In the Others segment, Shimano's sales decreased by 6.0 percent to ¥170 million (€1.4m-$1.6m), leading to an operating loss of ¥33 million (€272,400-$303,900), compared with an operating loss of ¥64 million for the same period in 2018.
The company's overall gross margin declined by 1.2 percentage points to 38.8 percent.