Busines news : Shimano Grows Profits Despite Weak Global Demand

Shimano Corp reported consolidated net sales reached ¥63.28 billion ($690m) first quarter ended March 31, up 1.3 percent from the same period the previous year.

Consolidated operating income decreased 9.4 percent to ¥9.75 billion ($106mm), ordinary income increased 9.7 percent to ¥11.1 billion ($121mm) and net income increase 9.3 percent to ¥7.65 billion ($83mm).

Sales of Bicycle Component increased  2.7 percent  to ¥51.1 billion ($556mm) and operating income decreased 6.2 percent to ¥9.50 billion ($10.3mm), while sales from the Fishing Tackle segment  decreased  3.9 percent  from  the  same  period  of  the  previous  year  to ¥12.1 billion ($131mm) and operating income decreased 52.3 percent to 310 million ($3mm). Sales from other businesses decreased 24.0 percent to ¥83 million ($900,000) and an operating loss of ¥51 million was recorded, following an operating loss of ¥3 million ($555,000) for the same period of the previous year.

Bikes sales disappoint in Europe, as expected in United States

European bike sales In Europe, retail sales of bicycles remained lackluster owing to extremely cold weather in the period from January to  March  and  the  sluggish  economy,  despite  high-growth  segments  such  as  e-bike  (pedelecs)  and mountain  bikes  with  29-inch  wheels  (29ers).  Retail  sales  in  the  U.S.  were  less  buoyant  than  in  the previous  year  when  the  winter  was  mild,  but  were  at  the  usual  level  for  winter,  despite  uncertain economic prospects. In contrast, retail sales in Japan were sluggish because of the harsh winter.

Bicycle distributor  inventories  in  Europe  remained  at  an  appropriate  level,  although  inventories  at  retailers were somewhat high. Distributor inventories in the U.S. were also generally at an appropriate level, but inventories held by importers were rather high. Demand rose in China.

Fishing sales hurt by cold Japanese weather, Asian slowdown

In the Fishing Tackle segment, Japanese retail sales declined from the same period of the previous year. Sales were greatly affected by the bad weather in January and February that brought cold fronts, heavy snow and high winds. Retail sales started to pick up in March as the weather improved and became warmer compared to a typical year, creating favorable conditions for fishing.

New Shimano products, including new Metanium  reels  released  in  February  and  Stella SW  reels  released  in  March,  were well received. On the other hand, for overseas, a challenging business environment persisted due to the impact of the European  debt  crisis  and  unsettled  weather  in  both  Europe  and  North  America. 

In  Asia,  the  business environment  also  became  harsh  as  China  experienced  an  economic  slowdown.  In Oceania, despite concerns about the possible adverse impact of flooding and bushfires, brisk sales to retailers continued from the previous year.

Adjustments to 2013 forecast

Shimano now expects ordinary income of ¥22.0 billion ($240mm) and net income of ¥15.0 billion yen ($163mm) for the first half of 2013, compared with its Feb. 15 guidance of ¥21.0 billion and ¥14.5 billion. The company raised its forecast of full year ordinary income to ¥44.0 billion ($480mm) from ¥43.0 billion, but maintained its guidance on full year net income at ¥29.5 billion yen ($322mm).