Leatt sees signs of recovery & hails continued innovation investment
Leatt saw a fall in revenue and net income in its 2023 full year results, but noted the first signs of a turnaround in the market while underlining its commitment to innovation.
Revenues for 2023 were $47.24 million, down 38%, compared to 2022, while net income for 2023 was $803,159, down 92%, compared to 2022. Q4 was less dramatically hit, however, with revenues at $9.80 million, down 10% compared to 2022.
Even those sizeable full year decreases are mitigated by tough comparables and Leatt’s record 2022 performance.
Good news came in the shape of cash flow from operations increasing 116% to $6.66 million, compared to $3.09 million in 2022.
Chief Executive Officer Sean Macdonald commented: “Although 2023 was a challenging year for the cycling and motorcycle industries, the fourth quarter presented the first indicators of a recovery in certain areas, and we remain extremely optimistic that ordering patterns will improve over time as participation remains strong, globally. The increase in our operating cashflow and our ability to remain profitable in a constrained environment is testament to our commitment to create long term shareholder value.”
Picking up on a theme CIN noted in this year’s Taipei Cycle Show, the Leatt CEO emphasised that investment in innovation is being maintained despite tough commercial conditions: “We believe that our continued investment in a strong pipeline of innovative products, global industry talent, and Leatt as a consumer brand will fuel future growth.”
Continuing that topic, Founder and Chairman, Dr. Christopher Leatt, remarked: “We continue to strive for design excellence and innovation in all that we do despite the headwinds that we have experienced, as evidenced by our win of the 2024 Design and Innovation Award, this time for the MTB All Mountain 5.0 jersey and All Mountain 4.0 pants.”
The nitty gritty: Leatt’s multi-channel shifts
Chief Executive Officer, Sean Macdonald revealed that D2C revenue had increased, while dealer sales were down – though it wasn’t specified if that related to cycle and/or motorcycle related product. He said: “Global revenues for 2023 were $47.24 million, a 38% decrease, when compared to a strong 2022, as dealers and distributors continued to regulate ordering levels in the context of elevated industry-wide inventory levels that are being digested as participation remains robust. Revenues from international distributor sales were $33.27 million, a decrease of 44% year-over-year, and although revenues from dealer sales decreased by 26%, revenues from consumer direct sales grew by 18%, when compared to the same period in 2022.
“Revenues for the fourth quarter of 2023 were $9.80 million, a 10% decrease when compared to the 2022 fourth quarter. Although international revenues decreased by 15% during the fourth quarter as we continue to manage credit risk on a global level, dealer direct sales were encouraging, decreasing marginally by 2%, and consumer direct sales grew by 23%. We continue to strive to reach a wider group of consumers on a multi-channel basis that includes leveraging digital and traditional brick-and-mortar channels with our partners globally.”
“This year we efficiently managed industry headwinds and the impact of sustained inflationary pressure. We kept spending under control, increased our margins and re-enforced our sales and marketing team. We also launched an entirely new line of Adventure (ADV) gear designed for all-weather and all-terrain conditions, representing a new milestone for Leatt and moving us into a significant crossover market that includes a wide community of riders globally.”
Speaking of investment, Leatt last year bolstered its team with the return of Bastian Dietz and the appointment of Dain Zaffke, both focused on the MTB market. Bastian Dietz rejoined as International Marketing Manager, MTB, while Dain Zaffke became VP of Sales and Marketing, MTB, focusing on the US market.
