Giant’s profits slashed by 17% and sales down 13% for first half of 2024 – but company expects “gradual” improvement as inventory levels return to normal

Giant says it expects its financial situation to “gradually” improve towards the end of 2024 as inventory issues that have plagued the bike industry in Europe and North America begin to normalise, after the bike brand reported that its pre-tax profits have slumped by 17 per cent during the first half of the year, with sales down by 13 per cent.

However, despite the continuing fall in sales and profits, Giant’s latest financial report represents at least something of a boost for the world’s biggest bike manufacturer, after its first quarter figures for 2024 revealed a sales drop of 20 per cent and a fall in post-tax profits of 38 per cent.

In April, Giant also predicted a continued short-term “challenge” for the cycling industry having reported a fall in pre-tax profits of 45 per cent in 2023, while sales were down 16 per cent and post-tax profit had fallen by 37.8 per cent.

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But according to the Taiwanese manufacturer’s report for the first half of 2024, the group’s consolidated revenue was NT$37.23 billion (around £900 million), a decrease of 12.6 per cent from the same period last year.

Net profit after tax was also recorded as NT$1.67 billion (£40m), while due to profit growth in China, Giant’s group gross margin rate was at 21.3 per cent.

Again citing the continuing strong sales of high-end bikes in the Chinese domestic market (a factor also highlighted by Shimano in its recent first-half report), Giant’s consolidated revenue for the second quarter of 2024 was NT$21.17 billion (£500m), down 5.8 per cent from the same period last year.

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The group’s gross margin rate also improved to 22.2 per cent, which Giant has attributed to an increase in the proportion of sales of its own-brand products, while net profit after tax was NT$1.15 billion (£28m), a decrease of 2.5 per cent compared to the second quarter of 2023.

In a statement, Giant said it expects things to gradually improve as the year progresses, echoing the predictions of industry experts who believe the ongoing issue of overstock across the industry could be resolved by 2025.

“Looking forward to the second half of the year, inventory adjustments in the European and American markets will return to normal, and the cycling trend in the Chinese market will continue to drive performance growth,” the company said.

“It can be expected that the group’s operations will gradually improve.”

> Giant sues Stages Cycling and recruits four top executives from the now-shutdown US power meter brand

Giant’s latest slump in sales and profits comes a month after the manufacturer made an initial $20 million bid for the assets of Stages, after the power meter brand ceased operations and laid off all its staff earlier this year.

In July, Spia Cycling, a subsidiary of Giant, made a stalking horse bid for the Stages, after the bike brand showed interest in purchasing a one-third share in the ill-fated company last year, although negotiations fell through.

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In April, Stages ceased operations and laid off all its staff, as UK consumers were reassured that warranty claims would be covered by its distributor Saddleback.

Stages initially stopped supplying orders to suppliers and then ceased shipping to customers, the brand’s website showing most products as being unavailable, although various models were still in stock at Saddleback.

Then it emerged that Giant was suing the power meter brand over unpaid invoices and already manufactured products. Giant manufactured Stages products and filed a lawsuit citing £11 million in unpaid invoices and already manufactured products valued at £5.4 million.

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At the same time it was revealed that four former top executives from Stages had also joined the Taiwanese bicycle manufacturing giant, including Pat Warner, who served as Stages’ senior vice president of product research and joined Giant as vice president of product R&D.

The total amount of the invoice is reported to be NT$454 million, or £11.1 million, and is attributed to power meters, exercise bikes, other products and parts, and storage and shipping fees. The complaint says that Giant also has produced and is storing products that Stages ordered valued at another £5.4 million.