Given the extent of the bike boom and consequent component shortages, it would surprise few in the bicycle industry to learn that Shimano’s sales and profits are up.
But the recently released official figures show staggering increases for a company in a mature industry that’s celebrating it’s 100th anniversary this year.
Shimano sales in its bike division were up 76.3% in the first quarter of 2021, compared to the same period last year. Operating income (profit) in the bike division was up even more -170%.
“Amid another wave of COVID-19 infections, global demand for bicycles continuing from the previous year remained at a high level,” Shimano said.
It said bicycle product sales were robust in Europe and North America, and supply was unable to meet demand.
“As a result, trends of shortages in market inventories persisted in each country.”
Net sales for the quarter were 103,757 million yen (A$1.23 billion) in the bike division, and operating income was 27,730 million yen. (A$330 million). That’s a 26% rate of profit.
Garmin Also Grows Strongly
Garmin Ltd. reported first-quarter 2021 revenue grew 25% year-over-year, boosted by demand for cycling products that included the release of the Rally power meter pedal series.
The fitness segment, which the cycling division falls under, experienced a 38% jump in revenue compared to the same period last year. The Rally power meter pedal line includes an off-road model, a new market opportunity for Garmin.
“Interest in fitness, health, and active lifestyle products has never been higher, and we believe that we are well positioned to capitalize on the opportunities ahead,” said Cliff Pemble, Garmin’s president and CEO.
Fitness operating income grew 138% in the quarter, which also was helped by growth in advanced wearable products, including the release of the Lily smartwatch.
Garmin’s total revenue was US$1.07 billion (A$1.38 billion) for the quarter. Fitness revenue was US$308 million (A$400 million). In addition to fitness, Garmin had double-digit revenue growth in outdoor, marine, and auto segments.
Helmet Market Also Booms
Bicycle helmet demand continues to fuel the Swedish based helmet technology company MIPS (Multi-directional Impact Protection System). This system is licenced for use in a wide range of helmet brands, mainly for their higher end models.
MIPS saw net sales rise by 48% in the first quarter of 2021.
Net sales were SEK (Swedish Krona) 83 million (A$12.8 million), compared to SEK 56 million (A$8.7 million) at the same time last year . Net income jumped 167% for the quarter, from SEK 12 million (A$1.9 million) to SEK 32 million (A$5 million).
“Historically, the first quarter has been dominated by the production of primarily snow helmets,” said Max Strandwitz, MIPS president and CEO. “This was not the case this year, since most of our sales continued to support the increased demand for bicycle helmets around the world.”
Strandwitz added stock levels will continue to be an issue, “at least for the rest of the season.”
These three reports were first published in Bicycle Retailer and Industry News (BRAIN)