Shimano sales down 12% in 2024, but cycling components giant points to "signs of progress"

Shimano's sales and income from bicycle components are significantly down on 2023, according to its latest financial results published today.

The figures are for the first nine months of 2024, with sales in its bicycle components division down 12 per cent to 253,861 million yen (£1.27 billion), while the segment's income has dropped by more than a quarter, down 26 per cent to 41,342 million yen (£207 million).

There were signs the bike industry's ongoing inventory challenges may be heading in the right direction, Shimano pointing out that "strong interest in bicycles continued as a long-term trend" and inventories at retailers "started to show signs of progress".

However, market inventories of completed bicycles "remained high", notably in Europe where Shimano blamed "unfavourable weather conditions in early spring" for weak retail sales of completed bikes.

The components giant, often viewed as a bellwether for the cycling industry as a whole, suggested there were signs the global economy "show signs of a pickup" following a "stagnant period", although regional challenges remain.

Shimano also pointed to the geopolitical risks caused by the prolonged invasion of Ukraine, "rising tensions in the Middle East", as well as a "stagnant" Chinese economy for exerting "downward pressure on the economic climate".

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The bicycle division's results largely reflect the wider company performance, Shimano's first nine months of 2024 seeing an 11 per cent fall in overall sales and operating income drop by a third (for cycling business alone, sales were down 12 per cent and income by 26 per cent).

The company reported its North American sales had softened, "although interest in bicycles was firm and adjustments of market inventories of completed bicycles were progressing".

In Asia, Oceania, Central and South America sales were "weak" and inventories "high" amid "sluggish" personal consumption. The popularity of cycling in China continuing to grow brought "favourable" performance, although the company's home Japanese market was reported to be "sluggish" too.

Shimano said it had received a "favourable reception" for the launch of its 12-speed mechanical 105 R7100 groupset and 12-speed GRX.

Interestingly, Shimano last year disclosed a 17,074 million yen (£85.5 million) loss on free inspections following its voluntary inspection and replacement recall notice for 760,000 Dura-Ace and Ultegra bonded 11-Speed road cranksets in North America, and a "safety inspection" in Europe. No figure has been provided in the financial results for the first nine months of 2024.

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In a further sign of the turbulent times facing many cycling businesses in recent years, last week we reported that Rapha's losses had almost doubled to £22.7 million last year. UK turnover dropped 20 per cent in 2023 amid a "challenged" cycling sector, in what was the brand's seventh consecutive year in the red.

Halfords shared financial results last week too, adding that the UK cycling market remains challenging following "UK's wettest spring since 1986".