Shimano has reported a 50.1 percent increase in consolidated net income to 9,537 million yen (€78.8m-$85.8m) for the first quarter of this year, but the group's operating income declined by 5.1 percent to ¥15.3 billion (€126.5m-$137.7m), as total net sales declined by 2.7 percent to ¥79.9 billion (€660.7m-$718.9m) during the quarter.
The bicycle components business recorded a 3.2 percent drop in operating income to ¥13.99 billion (€115.7m-$125.9m) in the quarter on 0.9 percent lower sales of ¥64.67 billion (€534.8m-$581.9m). The European market received Shimano's new STePS E8000 drive unit for e-mountain bikes well. It was released at the end of 2016.
Shimano says the European market for complete bicycles was normal for the quarter at the retail level. In North America, retail sales of bikes were sluggish on the West Coast and up on the East Coast, exceeding forecast. According to Shimano, distributors' inventories were at an appropriate level in both markets.
In China, where the market has been sluggish since 2015, retail sales were slightly higher than a year ago and distributors' inventories returned to an appropriate level. Retail sales continued to lack vigor in Southeast Asia and showed no signs of recovery in Brazil.
Inventory levels were somewhat high in Japan, where sales of sports bikes and community bikes were both sluggish.
Shimano's fishing tackle segment performed less well in the quarter, registering a drop of 18.8 percent in operating profit, down to ¥1,332 million (€11.0m-$12.0m) on 9.8 percent lower sales of ¥15.15 billion (€125.3m-$136.3m).
Sales of fishing tackle got off to a flying start in Japan, following a strong New Year at retail. They were robust in China and South Korea, but sluggish in Southeast Asia and Taiwan.
Sales increased in Europe, particularly in the U.K., as initiatives taken to secure pre-orders had a positive impact on orders for new products. In contrast, sales were down in North America and Australia.
The company still expects to record a moderate sales increase of 2.2 percent to ¥330 billion (€2.72bn-$2.97bn) for the full financial year, but its profitability will fall below its earlier forecast. It sees operating income decline by 8.6 percent to ¥64 billion (€529.1m-$575.9m), leading to a 14 percent drop in net income to ¥44 billion (€363.7m-$395.8m).
