TOKYO (BRAIN) — Shimano reported Tuesday that its first-quarter bike division sales were down 15.4% from the same period last year. Operating income in the division declined 26.1%.
The company said sales in Europe and North and South America "declined sharply" in the middle of March because of COVID-19, causing an increase in distributor inventories during that time. Sales in China we sluggish throughout the quarter due to the virus. In the company's home market of Japan, sales were weak for most categories, but e-bike sales were strong and distributor inventories were appropriate.
Bike division sales were 58,868 million yen ($552 million).
Shimano is withdrawing its forecast for the remainder of the year.
"The global spread of the novel coronavirus disease is having a growing impact on economic activity in Japan and around the world.
"With respect to the business environment surrounding the Shimano Group, corporate activities have been impacted due to factors including partial stoppages of production activities at overseas production bases as well as in-store sales and movement restrictions enacted by governments in countries where the company’s products are sold.
"As the extent of these impacts remains uncertain, it is difficult for the company to reasonably calculate business performance forecasts at this time. As a result, the company has decided to temporarily withdraw the business performance forecasts announced on February 12, 2020, and leave them as undetermined.
"The Company will once again announce business performance forecasts as soon as the situation allows."
Sales in Shimano's fishing division in the quarter were stronger than bike sales, declining 0.3% from the same period in 2019. Fishing division operating income in the quarter was down 1.1%.
Across all divisions, Shimano's net sales were down 12.3% to 76,920 million yen. Operating income was down 22.3% and ordinary income increased 61.8% due to foreign exchange gains and other factors. Basic earnings per share was 212.12 yen ($1.99).
