OSAKA, Japan (BRAIN) — Shimano says high-end bikes sales in North America and e-bike sales in Europe helped drive a 2.4 percent sales increase in the first quarter this year in its bicycle components division.
The company reported sales of 69,603 million yen ($622 million) for the division. Operating income in the division declined 5.6% to 13,926 million yen ($124 million).
"In Europe, retail sales of completed bicycles, mainly sport e-bike, remained solid in continuation from the previous year, and distributor inventories of bicycles in Europe remained at an appropriate level," the company said in an earnings report Tuesday. "In North America, although total retail unit sales of completed bicycles were sluggish, the sales amount remained at the same level as the previous year due to relatively strong sales of high-end bicycles. Distributor inventories remained at an appropriate level."
The company said sales in China and most other emerging markets remain sluggish, although sales in Brazil "continue to recover." It said sales of high-end bikes in Japan remained sluggish despite good weather. However sales of higher priced e-bikes are helping drive up the average bike price in Japan.
Shimano took a 200 million yen ($1.8 million) write-down in the quarter from losses related to the fire at its Sakai City factory last March. In its full 2018 fiscal year, the company wrote down 1,609 million yen ($14.4 million) from losses from the fire.
In Shimano's other major division, fishing, sales net sales increased 5.1% from the same period of the previous year to 18,032 million yen ($161 million), and operating income increased 7% to 2,364 million yen ($21 million).
Across all its divisions, Shimano said the economies in Europe and North America remain strong despite some uncertainties in the first quarter.
"During the first quarter of fiscal year 2019, the European economies were supported by personal consumption backed by a favorable employment environment, despite the economic slowdown due to concerns about fiscal instability in Italy and the Brexit problem in the UK. The U.S. economy remained firm backed by the solid labor market, although there were worries about personal consumption due to turmoil resulting from the partial government shutdown. In Japan, despite firm employee income and personal consumption, business conditions stagnated amid overseas economic weakness," the company said.
Across all divisions, Shimano revenues were 87,714 million yen in the quarter, up 2.9% from the same period last year. Operating income was down 3.8% to 16,285 million yen. Basic earnings per share was 108.42 yen.
