Shimano’s financial statement for the nine months running January 1st to September 30th highlight how the parts giant is still struggling with high inventories with European and North American partners.
Sales have dropped 18.8 percent in the bicycle division, with net sales for the business down 15.7 percent like-for-like. As a result, net sales tallied to 192,939 million yen, and operating income decreased 29.4% to 43,236 million yen.
Overstock troubles aside, poor weather and a small nod to Brexit feature in the reasoning for the European downturn.
“During the first nine months of fiscal year 2016, the European economies were on a trajectory to a moderate recovery as a result of buoyant exports to regions outside the EU because of the weak euro, despite growing pessimism about the economic outlook reflecting concerns about a decline in the EU’s economic status following the referendum result in favor of Brexit.”
Early spring is said to have “undermined” retail sales of complete bikes, contributing heavily to distributor inventories. Sales picked up from July onwards, said Shimano, but not enough to completely solve the stock issues faced by many and return the division to growth.
Likewise in North America retail sales declined compared to the same period last year. Distributor inventories of bicycles were however were adjusted to a lower level than in the same period of the previous year.
Inventories here are returning to normal levels, however Shimano suggest that retail sales have been underperforming. Poor weather again curbed demand.
Retail sales here are described as “sluggish”, leaving distributors overstocked. Continuing from the prior year utility bicycle sales remain weak.