Q1 Reports Continue to Show Bike Boom Slowing for Garmin & MIPS; Shimano Stock Dips
Following Tuesday's release of Shimano's Q1 financial report, the Japanese components company saw its stock price fall nearly 14%, likely because of the prediction that the bike boom may be losing momentum.
Shimano reported a 13.9% increase in 2022 Q1 net sales compared to 2021, falling short of expectations after two years of rapid growth. The same Q1 report in 2021 saw a 64.4% net sales increase over 2020.
While Shimano is still clearly - if more slowly - growing, Garmin reported a 28% decrease in revenue from its Fitness division, which includes cycling products such as GPS units, power meter pedals, and Tacx stationary trainers. The report also showed a 99% decrease in Fitness segment operating income, which the company attributes to a highly successful (and therefore difficult to match) 2021. Still, Garmin managed to bring in record Q1 net sales of $1.17 billion across all its divisions, a 9% increase compared to 2021. Its operating income was $229 million, an 8% decrease year-over-year. The growth was driven not by anything necessarily related to cycling, but largely by its Outdoor division, which saw a 50% increase in revenue and includes its GPS smartwatches and tracking devices. Garmin's Aviation, Marine, and Auto segments remained somewhat stable.
MIPS reported a similar pattern, still growing but unable to match its 2021 bike division sales. The Swedish helmet technology company reported a 48% organic growth, adjusted for changes in exchange rates (before the currency adjustment, the net sales growth is up at 65%). The company did not release the specific sport-by-sport breakdown of the numbers, but said the current growth is driven primarily by snow segment sales, even as the bike division continues to grow. In comparison, bike sales led the company's 2021 Q1 growth, thanks to high demand during the bike boom.
Companies that relied on bike division sales to boost their performance over the last two years can no longer do so.
While we certainly can't predict the future, it seems these reports all point to the bike industry beginning to restabilize after two years of soaring demand and resulting supply chain issues. Does that mean bike and component prices will ease back down a bit? We can only hope.
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This is fine. 2020 and 2021 were absolute outlier years and were not sustainable. Let's take some lessons from it, learn about supply chain constraints, and move forward. The industry is still growing, and if anything, it is now growing at a more sustainable rate.
Step 1:buy stock
Step 2:profit
Now that the pandemic is waning, people are going back to doing the activities they did before and many with less leisure time going back to offices. Some will keep riding, but a lot may leave the sport as they find it wasn't for them. So, the demand for Shimano and Garmin products may not get back to pandemic sales levels. I'm sure the companies will grow, but not like the big bounces we saw during the pandemic.
Again, just my couch surfing stock opinions.
When suppliers are still forecasting no inventory for the next 12-24 months of course there won't be any growth.
My company has an enormous amount of bookings that we cant fill because humanity cannot make more microchips. Our orders are non-cancelable, so EVENTUALLY, we'll fill all those bookings. And we're still getting dinged by Wall Street.
I didn't look very hard but if Shimano has strong bookings, this could be a decent dip to buy. But if their bookings are fading, could mean overall demand for cycling is going down.
There is always a base effect and businesses go in cycles but before we conclude it’s the end for bicycle growth we also have to consider whether it’s demand or supply that is the constraint right now. I suspect it’s a bit if both but that given what we know of manufacturing bottlenecks in places like china and Malaysia the demand picture is likely not as bad as the data suggests.
sadly there will be many many IBD's as casualties, expect 5-10% of bike shops to fail in the coming 24months
dearest Beta overlords/PB cucks: that Rebecca Rusch/concussion story is far too important to hide behind a f*cking paywall. literally. you are clearly using fear to goad people into paying for your shit service.
Look.....put all the "here is why a $900 handle bar is the bestestest!" article you want over there. But an article on how people CAN SAVE THIER f*ckING LIVES?......disgusting. you should all be ashamed. all. of. you.
It took me 2 seconds to Google "Rebecca Rusch Concussion" and another couple seconds to find a free, published news story about her unfortunate situation: 6park.news/arizona/rebecca-rusch-the-importance-of-self-reliance-in-the-field.html
Sheesh. I understand you have an opinion about something, but it doesn't make it right or justifiable lol.
www.trailforks.com/search/?search=snickers
A gx santa cruz blurr tr gx is $7600. what the f*ck is trek doing?