Shimano sales down 18%, profit down 40% in first half of 2023

After predicting a difficult 2023 in the midst of a record year in 2022, Shimano appears to be suffering the same difficult headwinds as the rest of the cycling industry, with double-digit falls in both sales and profits.

Shimano revealed a 17.7% fall in sales of bicycle components in the first half of 2023, compared to the first half of last year. Net sales in the brand’s bicycle division fell to ¥205 billion (around £1.1 billion), with operating profit also down by 39.5% to ¥42 billion (circa £230 million).

The brand’s fishing components performed somewhat better but shares in Shimano on the Tokyo stock market fell 3.8% on Wednesday, rebounding after dropping as much as 5.8% upon initial release of the figures.

Bicycle retailer reports that the brand does stayed optimistic about its long-term future.

“Although the strong interest in bicycles cooled down as progress was made toward recovery to pre-COVID-19 day-to-day routines, interest in bicycles continued as a long-term trend," Shimano said in a statement.

While the baseline for the cycling industry as a whole may now be on a higher footing than before the pandemic, the short term bloating of the sector, along with the seemingly ever present supply issues, and subsequent contraction of demand has meant a noticeable downturn across the board.

Shimano said demand for complete bikes in Europe was “ somewhat low” and industry inventories “remained high”. They suggested the fall in demand it said it was “partly due to the impacts from unfavourable weather conditions in early spring”.

“In the North American market, sales remained weak and market inventories were at a consistently high level,” Shimano said.

Shimano also said that production cutbacks at factories are making it “difficult” to absorb the rise in manufacturing costs.

This combination of high inventory levels thanks to delayed fulfilment, and now low demand has been seen worldwide, and in the UK has had clear impacts such as the liquidation of long standing distribution businesses like Moore-Large.

This negative situation has been seen across more or less every part of the cycling sector, from manufacturing to distribution.

Peloton has massively struggled since COVID-19, Wahoo has been brought back from the brink of collapse, Zwift has seen layoffs, along with Wahoo, and even giants like Specialized have had to reduce its workforce numbers. Even national federations haven’t been immune, with USA Cycling seeing revenue losses and job cuts.

Looking forward, Shimano now forecasts its end of year sales figures to total 450m Yen, which would be a full 40% reduction on 2023 sales.