TOYKO (BRAIN) — Shimano is forecasting a 20.5% drop in net sales for its fiscal 2023, citing global economic conditions and supply chain disruptions.
The company reported this week that its 2022 bicycle component sales were up 16.6% from the year prior.
In its fourth quarter and full-year financial results report, the company forecast that 2023 sales in its bike components business will produce 396 billion yen ($2.95 billion), down from the 517 million yen recorded in 2022, a 23% drop. Bike component sales make up about 79% of Shimano’s business with fishing tackle providing most of the rest. For 2023 Shimano forecast a 7% drop in its fishing business.
Company-wide, Shimano is forecasting a 20.5% drop in net sales, a 37.9% drop in operating income and a 32.3% drop in ordinary income.
In the bike business, Shimano forecast net sales of 200 billion yen in the first half (down 19.6% from 249 billion yen in the first half of 2022) and 196 billion yen in the second half next year (down 27% from 268 billion yen).
Shimano didn’t mention the industry’s inventory concerns in its forecast.
“There is concern that global supply chains will be disrupted by supply constraints and heightened political tension caused by geopolitical risks that have emerged, such as the prolonged situation in Ukraine, and that high inflation dragging on and tight monetary policies adopted globally may put downward pressure on economy,” the company said.
Regarding the U.S. market, the company said, “there is concern that high inflation and rises in policy rates may put downward pressure on economy.”
It concluded, “In these circumstances, the Company emphasizes not only striving to develop and manufacture ‘captivating products’ that bring sensations to many people as a ‘development-oriented digital manufacturing company’ of Japan origin, while closely monitoring trends in demand for bicycles and fishing tackle, but also moving forward step by step as a ‘value-creating company’ that continues to create a shared value between corporations and society. We will endeavor to further enhance management efficiency and strive for sustainable corporate growth by pursuing the creation of new cycling and fishing culture.”
