Shimano US sales 'remain weak' as global revenue falls in the first quarter of 2023

Japanese component manufacturer Shimano has said its sales in the US cycling market "remain weak" as it saw global revenue fall in the first quarter of 2023 compared to the same period last year.

Published on Tuesday, the Japanese componentry giant's latest finance report revealed that its revenue from bicycle components fell 16.8% in the three months to the end of March compared with the same period of 2022. First quarter bicycle revenue totalled 98 billion yen (£591m), down from 118 billion yen (£710m).

In addition it said operating income decreased 31.8% to 22 billion yen (£133m) down from 32 billion yen (£195m).

The company's report said: "Although the strong interest in bicycles cooled down as progress was made toward recovery to pre COVID-19 day-to-day routines, interest in bicycles continued as a long-term trend."

"On the other hand, concerns about economic recession, including rapidly rising inflation, led to a slowdown in sales of completed bicycles, and market inventories generally remained high, despite ongoing supply and demand adjustments."

It listed central bank increases in interest rates, the fall out from the ongoing war in Ukraine as slowing down the cycling market.

However, in Europe, according to the report: "Interest in bicycles continued to be high, and retail sales of completed bicycles, especially e-bikes, was solid. Market inventories generally remained at high levels, although some high-end models were in short supply."

Whereas in the North American it said: "Sales remained weak and market inventories were at a consistently high level."

The report continued: "In the Asian and South and Central American markets, although interest in bicycles was firm, sales remained somewhat sluggish due to cooling consumer confidence on account of currency depreciation and rising inflation.

"However, in the Chinese market, sales remained strong, especially for road bikes, owing to the growing momentum of outdoor sports cycling.

"In the Japanese market, the soaring price of completed bicycles due to yen depreciation and other factors slowed the pace of sales and market inventories remained somewhat high."

The company highlighted its 2022 release of its updated 105 road groupset and e-bike STePS (Shimano Total Electric Power System) components as measures that had helped to counter the tough global market conditions.

In February, Shimano's 2022 annual report showed that it had recorded its highest annual bicycle component sales.

It detailed a total net sales from its bicycle division of 517,436 million yen (£3.2 billion). That marked an increase of 16.6% on 2021, the previous record-breaking year.

At the same time operating income from cycling products rose 15.9% to just under 145,000 million yen (£900 million).

Founded in 1921, the Japanese company previously also produced golf and snowboard gear alongside its flagship cycling and fishing ranges. While bicycle components form Shimano’s main products, the brand also sells footwear, pedals and apparel.