OSAKA, Japan (BRAIN) — Shimano's bicycle-related sales slumped 17.4 percent in the company's fiscal 2016 to 259,455 million yen ($2.27 billion), while operating income in that segment declined 27.5 percent, the company announced Tuesday.
The company's net sales were down 14.7 percent, exceeding the 8 percent drop for the year that the company forecasted last February and slightly exceeding the 14.2 percent decline the company forecast in releasing its first half results in October and re-iterated after its first three quarters. Shimano's sales were up 14 percent in 2015, but quickly declined in 2016, when bike sales were down 20 percent in the first quarter.
In a typically terse summary of financial results for 2016, the company outlined the conditions that led to the year-end results:
"In Europe, bad weather in early spring greatly undermined retail sales of complete bicycles, resulting in a continuing high level of distributor inventories. However, thanks to good weather from July onward, sales became brisk. As a result, distributor inventories were adjusted to an appropriate level."
"In North America, retail sales of complete bicycles were slightly less than in the previous year. However, distributor inventories of bicycles, which had been high since the beginning of 2016, were adjusted to a lower level than in the previous year."
"In China, lackluster retail sales of sports bicycles persisted from the previous year owing to the economic slowdown and bad weather, and were below the previous year’s level. On the other hand, distributor inventories, which remained at a high level, started to stabilize."
"As regards other major emerging markets, retail sales of sports bicycles in Southeast Asia, which had been robust, were at a level lower than the previous year. Sales in South America continued to be soft because of the economic slowdown and weak currencies."
"In the Japanese market, retail sales of sports bicycles, which had been robust until the previous year, were lower than the previous year’s level and distributor inventories were somewhat high. Retail sales of community bicycles remained weak, continuing from the previous year."
Bike-related sales make up ab out 80 percent of Shimano's business. The company's fishing division saw net sales decline 1.7 percent from the previous year to 63,143 million yen, and operating income increased 27.4 percent to 6,842 million yen.
That last para is interesting, always wondered how much fishing related products they sel, thought the split would of been much greater (in favour of fishing). Wonder if the LFS (local fishing shops) have same supply issues that LBS' have and also do fishing people buy their gear cheaper o/s like we do?