Revenue Round Up: Another Quarter of Big Growth for the Bike Industry with Warning Signs on the Horizon

May 18, 2021
by James Smurthwaite  
There have been positive financial reports across the board in the first three months of 2021. The bike boom seems to be continuing its momentum from the end of 2020 and, despite widespread reports of product shortages, brands are reporting year-on year growth with some even posting record quarters.

This is somewhat misleading though as the first quarter of 2020 that these results are comparing to was a turbulent one as the world reacted to the rapid spread of COVID-19 with factory shutdowns and the strictest lockdown periods of the pandemic.

Still, the bike industry continues to flourish, however there are scattered warnings of further product shortages and price increases in the future. Here's a run down of Q1 financial results.

Shimano Bike Sales up 76%

Shimano EP8

Shimano recorded a Q1 net sales increase of 76% year on year from the same period in 2020. Its sales totaled 103,757 million yen, and operating income increased 169.3% to 27,730 million yen.

Despite the second wave of lockdowns around the world, global demand for bicycles remained high, including in Europe and North America. Shimano warns of shortages in every country, but it still described its order taking in the quarter as "brisk". While in 2020 Shimano spoke about its Deore groupset leading its growth, this time it seems that EP8 and Shimano Steps Sport were the stars of the show as the market for transportation and e-bikes grew.

More info, here.

A Record Quarter for Fox Factory as Sales Nearly Double Year on Year in Bike Segment

Fox Factory posted its best-ever quarter revenue with its bike segment recording 85.5% year on year growth.

This is Fox's third consecutive quarter of record sales as sales for the whole company increased 52.5% to $281.1 million, compared to $184.4 million for the same period in 2020. The increase in Specialty Sports Group products (the bike department) was driven by increased demand in both the original equipment and aftermarket channels.

Mike Dennison, Fox’s Chief Executive Officer, said, "Our team continues to execute at the highest level, despite the meaningful supply chain challenges which exist across our business. Our performance in the first quarter displays the tenacity and adaptability of the superb team we are building at Fox. I remain optimistic about our prospects in 2021 and beyond as we expect to continue to deliver impressive growth in a dynamic business environment."

More info, here.

Dorel Sports Records Eighth Consecutive Growth Quarter and Announces Price Rises

Dorel recorded its eighth quarter of consecutive growth and a first-quarter revenue increase of 43.6% from US$188.2 million last year to US$270.3 million in its Sports division.

Dorel said that the demand for bicycles "continued unabated" and highlighted that the appetite for Cannondale models in particular was unprecedented. The group's margins were pressured by increases in ocean and domestic freight, rising costs of raw materials and bicycle components and the impact of a weakening USD versus the Chinese Yuan but its operating profit for the quarter grew to US$21.8 million, compared with an operating loss of US$0.6 million last year.

Dorel expects the increased cost of doing business to continue and confirmed it will have to increase prices for the rest of the year. Martin Schwartz, CEO, said: "Continuing cost increases in all segments for freight and commodities, as well as ocean container availability, will continue to create significant pressures. We will have to offset this with price increases through the rest of this year.

More info, here.

GoPro's Pivot to Online Brings Q1 Success

In April last year, GoPro pivoted to becoming a primarily direct sales brand and it's those online sales that have helped it record a 71% increase in revenue year on year. The company's total revenue grew to $204 million with a massive 224% increase in sales coming directly from accounting for $82 million of that.

GoPro also hit 1 million subscribers in the quarter for its $49.99 per annum service that offers cloud storage, discounts and a camera replacement service. This is a growth of 180% year on year and GoPro notes that it "represents approximately $50 million of high margin annual recurring revenue."

The report does note that inventory is currently low for the brand but it feels, "well-positioned to capitalize when the world regains its footing with the rollout of vaccines and improved consumer activity levels."

Nicholas Woodman, Founder and CEO, said, "We’ve evolved from a hardware unit-sales-centric business to a successful direct-to-consumer subscription-centric business with a significant opportunity to grow margin and profitability with continued subscriber growth. The value-creation implications of this shift are meaningful, and we’re energized by the opportunity as well as our outlook."

More info, here.

Bicycle Helmets not Snow Helmets Boosted Mips' Q1 Sales

Kate Courtney is still on the hunt for a good result and getting back into her old winning self. She s focused as ever lining up for this one.

In the months of January to March, Mips' sales are traditionally dominated by snow helmets but that was not the case this year. Instead, most of the brand's sales came from the increased demand for bicycle helmets around the world and helped the brand to a net sales increase of 48% year on year to 83 million SEK.

Mips was originally forecasting that stock issues would return to normal by the halfway point of this year, however it has now revised those predictions, saying, "with less than a quarter to go, we see that this will not be the case and that stock levels will continue to be challenged at least for the rest of the season."

Max Strandwitz, President and CEO, said: "The first quarter, which is normally our smallest quarter, became the fourth largest quarter ever in terms of sales... Growth was primarily driven by the Sport helmet category, which continued to show good demand for bicycle helmets. It is important to note that we have soft comparative numbers, as most factories did not produce at full capacity during the first quarter last year."

More info, here.

Leatt Records 71% Increase in Revenue

Leatt has recorded a 71% increase in revenue year on year from $7.5 million in the first quarter of 2020 to $12.9 million in 2021.

This breaks down into a 48% increase in neck brace revenues, 79% increase in body armor revenues, 109% increase in helmet sales and 47% increase in revenues from the sale of other products, parts and accessories.

More info, here.

Posted In:
Industry News


  • 149 8
 I’d like to know what bike companies plan to do when “everything goes back to normal” and the bike companies have all ramped up production, increased prices and the worlds economy goes into a tailspin due to inflation.
  • 39 1
 I've been worried about this since the spike started.
  • 46 0
 I remember the Santa Cruz CEO saying most suppliers aren't willing to ramp up production much because they're not sure if the demand spike is a temporary covid-related shift or not (basically same concerns as you mentioned). Significant increases in production require investment in PPE and can take up to 5 years - keep in mind PPE suppliers seeing the same materials shortages. Sadly I think the inflation we're seeing in the bike industry won't revert much, if at all.
  • 94 10
  • 4 0
 No, you don't want to know...
  • 21 2
 @scott-townes: That is an absolute certainty. Hence: YOLO.
  • 22 0
 My theory is that neither the brands nor the manufacturers (mostly far east) are stupid and know what's going on. The manufacturers particularly are quite adverse to increase capacity with all the associated fixed cost increase and exposure to market risks.
But repeatedly calling this the "new normal" is a great way to attract investment, and that's why their public discourse seems often to be seemingly quite naive about the whole thing
  • 8 0
 Remember 1996-7 when about half the bike shops in the US folded when the MTB boom went bust??
  • 30 2
 We won't be able to afford to ride, however will be entertained by free feature length new bike release movies.
  • 2 3
 Production just doesn't spike and come down, forecast and planning can be 1 year or so ahead. So many industries are facing the same question just now of when will demand start to fall off, but raw materials prices are going up like never before and lead times are getting crazy. The more E-cars that are out there the more shortages and price increases we might see.
  • 16 1
 I expect most manufacturers have pushed production rates without investing in commissioning new production lines or facilities.

For example a 16 hr/day plant could move to 24 hr running temporarily, rates could be pushed on existing equipment, or planned maintenance deferred temporarily whilst the current demand is ongoing.

There are options that potentially allow them to increase production to meet demand, but also scale it back when demand drops, depending on what their starting point was.
  • 2 0
 might be seeing it already with the indoor bike trainers that were ordered to keep up with demand finally showed up in the spring, after everyone had started riding outside. Just hope you can sell them next fall.
  • 14 2
 I’d like to know what Pink Bikes revenue is now that trail forks is no longer free
  • 2 3
 @JDFF: Is your current bike going to melt and leave you with nothing to ride?
  • 8 1
 Inflation can have many causes. Some of them can self correct quickly while others cannot. The inflation we are experiencing ATM is supply side driven which will self correct as factories start up again and scarcity goes down. The thing i worry about is the self fulfilling expectation of inflation which typically takes longer to self correct.

In otherwords, everyone wringing their hands about sustained inflation are increasing the likelihood of that sustained inflation.
  • 1 0
 @scott-townes: well, yes. At some point
  • 1 0
 @scott-townes: This is true
  • 1 0
 @scott-townes: I’ve been watching a show on Prime called Upload about people who can live for ever through a digital consciousness....f*ck that.
  • 4 0
 @jdendy: I uninstalled as soon as they asked for a subscription. It’s actually been very nice not to map rides, worry about comparing to others and just getting out and focusing on the fun.
  • 5 0
 @scott-townes: but first I have to find my GX pedals
  • 5 0
 @freestyIAM: This might have a little to do with it also:

Imagine having a credit card with an 8 trillion $ limit (assuming they stop here). The fed does
  • 10 9
 Inflation will be transient, stop buying into all the fearmongering.
  • 5 1
 @GrandMasterOrge: exactly, there is still shortage because they’ve responsibly ramped up production knowing that there will be a decline, did so wisely. Those who produce everything in house face the biggest challenge, because building more capacity is long term. Those who outsource can increase production but at the risk of quality. People calling bike companies morons because they can’t get their stuff need to remove themselves from mommies teet and get some reality.
  • 5 1
 @freestyIAM: These companies are reporting major increases in sales, generally around 70%. Yet you’re saying the problem is they’re not making as much as they did previously and that’s what’s causing the supply shortages?

The theory of a supply side throttle is reasonable, and I’m sure covid related complications to running a factory are contributing to the current shortages. But the data is screaming that demand has exploded, and it’s just silly to say demand isn’t driving the situation. They’re very clearly making more stuff than they ever have, we’re just buying even more.
  • 1 0
 @betsie: goddamned e-cars!!
  • 2 0
 @GrandMasterOrge: most of the supply issue is a result of the exact opposite. It's not that the current infrastructure can't meet supply demands, it covid regulations on staffing that create the shortages. The production plants that would normally run say 500 employees 24hrs a day have been running 25% or less staff with months of zero production mixed in.
  • 2 0
 @Jheitt142: how are they posting such massive sales figures if they’re not running production? Your explanation would make sense if there were supply issues and companies were hurting, but the data doesn’t point to that.
  • 3 0
 @freestyIAM: Its not just supply side driven, its almost every central bank keep rates at a bare minimum, its buy back programs through the fed, increased short term lending, removing capital reserve requirements, "printing" money, federal aid programs, and tightening labor market.
  • 3 0
 That's when I'll buy another bike ;-)
  • 12 19
flag likeittacky (May 18, 2021 at 21:17) (Below Threshold)
  • 4 5
 @Blackhat: For sure, there is increased demand but that also looks transient to me. It was brought on by the pandemic when people found themselves unemployed and cycling on the shortlist of things you can do. As people return to full employment the demand will diminish.

@sikeitsryan :
1) we should be so lucky that a principle driver of this inflation be monetary policy, because those can be changed quickly.
2) There is no labor market shortage. There is a pandemic which has people transiently hesitant to return to work for fear that the working conditions will not be safe.
3) Reg fed aid programs,
- would inflation be lower if it weren't in place? Maybe.
- Would the economy be in a tailspin? Probably.
- Would millions suffer hunger and eviction? Certainly.
So the federal aid programs' merits speak for themselves if you can prioritize their effects and their likelihoods.

again, the biggest risk of sustained inflation is the expectation of sustained inflation, e.g you two.
  • 2 0
 @chicane32: I'm on a bad streak of breaking frames (3 issues on 3 separate bikes the past 14 months). Good thing is that I'm well stocked up on extra parts and rims. Just have to keep the frames together.
  • 5 0
 @Blackhat: these sales figures are generated from stock that was already in production prior to covid. Empty sales floors last summer were because of an influx of demand that only needed to be met by increased shipping rates.

The material supply issues are only hitting now. It's exactly what this article is about. Companies are actually out of product, unable to obtain raw materials. The factorys that build the frames don't have enough tubing. That was not a problem for 2020 sales.

Companies are raising prices because they won't have as much to sell through the year and probably next.
  • 1 1
 @scott-townes: Yup, but I think the Japanese are working on something.
  • 1 0
 @GrandMasterOrge: Exactly, the same in most industries, for example my colleagues business used to operate with machine downtime for maintenance 1-2 days a month it has now been stretched to 12hrs in 2 months and in reality is less than that! His view is that it is not affecting quality and they can run like this for another 6 months if needed but then there will be a few weeks downtime to repair / replace equipment.
  • 1 3
 @jamesbrant: Thats right... COVID and E-Cars.
Cant say much more than that as tied by work and NDA's.

I work in R&D and supply chain for a mass manufacturer in the medical sector!.
  • 1 0
 @scott-townes: Not if we joint the collective?
But do you really think that melding minds is really the answer to greater intelligence?
Think for your self's, but also need to imitate a robot to blend in!
  • 4 1
 fun fact! Inflation has already happened. the *effects* of inflation are what most people call "inflation". Actual inflation is when the supply of money is increased. That happend already. You are already seeing the effects....much like the ocean pulling out suddenly and exposing the sea bottom. We all know what's next....
  • 2 1
 @freestyIAM: wrong. what you are talking about is the *effect* of inflation. the inflation has already happened. the worlds governments and their financial arms have all hyper inflated the supply of money. The effects of that inflation cannot be dodged. it's comin, and it won't be pretty. I feel bad for anyone that doesn't have the foresight to get out of the path of the train via smart investing. get out of currency, non-blue chips and index funds. get into physical goods(real estate, metals)
  • 1 1
 Any manufacturer that has a "lean culture" should be able to adjust accordingly. Also seems like bike shops are just waiting for the bubble to burst as it is.
  • 1 0
  • 1 1
 @nyhc00: if only it worked like that in real life. .with lead times pushing out LEAN has made life very difficult for companies.
Companies purchase against forecast and BP and if forecast goes up, therefore BP and the lead time is now 70weeks from receipt of order....
Then add companies increasing production with new sites and potential yield issues due to product variance even if a PQ passes and it's a world of pain.

Apple for example are now making their own PCB's in house now and buying cloth to ensure quality and lead times. This has a knock on effect to the rest of the industry.
  • 1 0
 @nyhc00: Lean principles can only go so far. Here we are talking about manufacturing with some considerable capital requirements to increase capacity.
  • 1 2
 @Arierep: this is not necessarily true.
You are assuming that all production lines run at high capacity rates to need increases in capacity, also no mixed model lines.
What about when you have to do engineering builds, investigations, DV builds, IOQ, PQ, process improvements etc. Etc. There is capacity on lines to accommodate all of these things.
I bet there are issues with backlog and capacity due to lead times but the 'keeping the lights on' activities still have to happen.

Just a guess there of course.
  • 1 1
 @TheMrSteve: No one is going to build new capacity because freight is the bottleneck, plus like you guys are implying no one wants to be sitting on excess inventory that they’ll write off on obsolescence when this current boom goes bust and the market is flooded with lightly used bikes.
  • 4 0
 So the assumption is that people were trapped by Covid and bought bikes they didn't really want to ride; so as soon as they are free to return to work and other leisure they will stop entirely?
I can see this as a factor, but I also think that Covid was more like a catalyst. Cycling was growing in popularity before Covid and it was just the trigger for people to devote more time to it.
So I would argue that the current surge is just a step in a steady increase that was already there. Sure it will dip back again slightly, but it will still be higher than pre-covid and still be on an upward trajectory.
So any company that was already running at close to full capacity would be wise to plan for at least a modest rise in capacity. Newer, better machines are almost always a sound investment for example.
  • 1 0
 @Blackhat: an uneducated guess would be not having to pay hundreds of peoples wages (????)
  • 1 0
 @betsie: Yes, I am assuming they were already running at nearly full capacity.
What both me and you are saying is correct, just depends on the set of assumptions you take
  • 1 0
 I don’t thing most companies of non critical consumer goods are ramping production for that reason from a capital asset addition standpoint. They are sure utilizing what they have now to every little marginalized gain they can think of though.
  • 1 0
 @cougar797: it’s weird then that the YT press release for the new Capra stated that they were increasing production.
  • 1 1
 @unrooted: Congratulations you found an outlier possibly? Do they make their own frames or have they just bought more manufacture capacity percentage.
  • 2 0
 @cougar797: can you let me know which companies are making their own carbon frames? I can only think of Geurilla Gravity...
  • 1 0
 @unrooted: Well that is my point, I don't think many do. When they see increase production it means they got a bigger chunk of a 3rd party factory somewhere and the other dudes lost some. Doesn't take the same kind of investment. (Not a bad plan on their part don't get me wrong). I just don't think many production facilities will be expanding until everyone's understands how this will play out long term.
  • 1 0
 @Blackhat: do we know how bike companies are reporting sales figures? i don't know how their accounting works but if they're including numbers for pre-orders from dealers than it would make sense that the sales numbers are much higher than actual production numbers.

if john goes to local bike shop, pre-orders a Stumpy, puts down a $400 deposit for a $4k bike, and local shop places the order with Specialized even though it won't be delivered until 2022, does that $3k in sales get booked by Specialized as revenue for the quarter?
  • 1 0
 @jhuanger: Pretty sure that would be accounted as a $400 cash income, with an accompanying $400 account payable entry that makes it neutral. I'm no accounting expert either, but I took accounting in college and they were pretty clear on tracking future obligations as liabilities.

But that situation doesn't apply to GoPro and MIPS. Consumers rarely buy such products in advance. They're still killing it.

@freestyIAM: I agree, the demand is most likely transient, and it's possible prices will drop back down at some point. And temporary increases in demand for certain goods are indeed a likely cause of inflation independent from monetary factors. I suspect the two are both contributing.

But that's not what your post said, and I was responding to your post.

@Jheitt142: That's a reasonable explanation... for Q2 2020. But shortages were here 9 months ago, so any product that was "sold" in Q1 of 2021 was most likely made recently. And they're still reporting 70% sales increase compared to the year before! There's no way factories are producing less than pre-covid while supporting those numbers.

Of course factories are out of materials! Demand for every type of durable goods (boats, cars, bikes, camping equipment... you name it) has sky rocketed. Those all compete for the same resources. A shortage is proof that manufacturers cannot keep up with demand, but it does not tell us whether that's due to reduced production or increased consumption. In this case we have abundant evidence that demand has increased.
  • 2 0
 @two-wild-dogs: So you think they were just paying them out of the goodness of their hearts pre-covid? Note that sales have increased as well as profits. You can't increase sales by laying people off unless it lets you sell for a lower price. And god knows they're not doing that!
  • 1 0
 @G-Sport: But they produce bikes on an automated line, you can't just buy new equipment and off you go. There is skilled labor involved, and carbon bikes require a mold that costs between $250-300k a piece. So you would not only need to invest in the equipment, but also train and develop a skilled labor force. Its so much easier to just add another shift vs. invest in something that won't be running for at least 6mo, when demand will likely level off, in an already niche sport.
  • 2 0
 @G-Sport: Here's my take on your thought at least for the US:

-Covid did cause a spike to biking as people were looking for some type of recreation during Covid
-Buying a bike is a "luxury" item. Many people still had their jobs and were given stimulus money so a natural response was to buy a bike to fill that recreation desire. If you really lost your job/significant income, one wouldn't go out and buy an expensive bike over other financial necessities.
-Like most things, many will find they are not using the bike post Covid as they thought. These will either sit in one's garage or some will decide to sell them. The selling of slightly used bikes will be a factor against new full priced sales (bikes are not cheap).
-The bubble of free stimulus money will no longer be around.
-After this heyday, the bike industry will again/continue trying to find "slight improvements" to try to drive new sales. Arguably, those that bought these expensive bikes during Covid will not see the value in spending their own money (without extra stimulus money) for the lastest upgrade because the bike they bought already surpasses their need/capability/local trails in most situations. Even avid bikers are less convinced nowadays they "must" upgrade.
-Consumers will start to see that a "modern" bike has achieved most of it's advancements negating the need for upgrades. Just as with home computers in the past, most started to find that upgrading/replacing one's computer frequently was not gaining them anything of significance (maybe gamers being the exception).

In 5 years, I'll have to go back and review this comment to see if this is how things panned out.
  • 4 0
1. Yes
2. The cause of the labor market shortage doesn't matter, if companies need to raise wages, they'll most likely raise prices regardless of why
3. I'm not arguing the merits of the programs, I'm just telling you that's why we're getting inflation. The fed is choosing to let inflation go higher with the idea that it can be brought back down when there is less pressure on the economy.

Its not an "expectation" of sustained inflation, its literally the people in charge of monetary policy telling us they're going cause sustained inflation in the medium term.
  • 1 0
 @scott-townes: Inflation, taxes, and death - the only certainties in life!
  • 2 1
 @sikeitsryan: I feel like we actually agree on most things except what sustained inflation means. I think sustained inflation would be inflation above 3% for more than 1 year. You are right there is a labor market shortage (i shouldn't have said there is none). I meant to say that it just short term labor shortages since the pandemic is (God willing) going to end this year. The federal aid programs similarly will end within a year.

So certainly there is short term inflation but nothing in the market fundamentals indicated to me that we are headed for sustained inflation. The biggest risk is not in the market fundamentals but the psychology/sociology of the market actors. If everyone becomes convinced we a headed for sustained inflation, then its a self fulfilling prophecy.
  • 3 0
 @freestyIAM: Yeah I think so too. We'll have to wait and see where that inflation # ends up settling but just basing it off what happened in 08 I do think it'll sit above 3% for a couple years. At the same time I think we're better equipped to handle this situation now that we've been through it before though so who really knows.
  • 2 0
 @Blackhat: You're awesome if you just randomly remember this from college!! I'm impressed and commend you.
Correct, unearned revenue(taking cash in advance of delivering the product or service) is a liability on the balance sheet. Unearned revenue is relieved(debited) once a set of conditions have been met for recognizing revenue, this is when the actual sale is booked in accounting terms and reported on financial statements. At least that's the Generally Accepted Accounting Principle way here in 'merica.
  • 2 0
 @Arierep: In my experience I would be surprised if they were at full capacity normally as that is bad planning.
I wasn't guessing, it's a big part of my job!
  • 1 0
 @freestyIAM: Get outta here with your well-reasoned argument and throw poop with the rest of us dumb monkeys!
  • 1 0
 Now I can't buy anything to upgrade my bike, everything is too expensive
  • 42 0
 The Used bike market is going to be so nice here in a couple years. Should be fun to try and assume someone's loan on their bike!!! HAHA.
  • 52 0
 Should be fun to see how a repo works at the bike park. Keep that Strava feed private
  • 5 1
 I can't wait to buy bikes 1/3 of their msrp
  • 1 0
 Lots of $10,000 evokes on my trails. Perhaps I open a repo business???
  • 1 0
 @SATN-XC: Van rolls up like a shuttle; bye bye bike
  • 1 1
 I cant wait. Can probably get a lightly used version of anything you want in a year or twos time.
  • 1 0
 @cougar797: I doubt it will really happen in the next year or two. If it's that quick people will be selling their bikes for 90%+ if they're barely used. What's more likely is they'll keep telling themselves they'll get into it and after more like five years they'll sell for a more moderate price. And of course by that time things will have changed and it'll be like 2014 bikes today, kind of out of date and not as desirable as something "modern".
  • 48 11
 Just so we are all VERY clear...even with the huge cost increases in materials, shipping etc etc. here are the change in gross PROFIT for these companies year over year. Take it as you will but this says a lot...

Shimano: +72% Gross PROFIT YOY
Fox: +73% gross profit YOY
Dorel: +38% gross profit YOY
MIPS: +51% gross profit YOY
Leatt: +72% gross Profit YOY

We will see if things level but the whole "all costs are going up" trope doesnt hold much water when they are making record profits even with the increases.
  • 46 5
 What are you, some kind of communist or Marxist? You can't expect these poor 'ol companies to absorb the increased costs and take away from their profits!

On a serious note, the numbers don't lie and we're being collective fleeced. These companies can definitely absorb the covid costs but they expect us to pay for it while giving us less for more.
  • 19 3
 @matadorCE: Yeah I would never expect them to absorb all of it, nor would I expect them to even keep profits flat, companies are in it to make money, I get that. But when your customer base is slammed with untenable delay times and significant increased prices....seeing 50+ % increases in PROFIT stings a lot.
  • 21 12
 Those are revenue numbers, not profit.
  • 2 3
 @wilsonians: We don't know their net numbers and maybe those tell a very different story but yeah it certainly doesn't look good from a consumer perspective.
  • 18 9
 Yeah this is revenue, not profit. These numbers have not taken out the cost of production, distribution, marketing etc.
  • 15 2
 @swats10: I pulled the financial statements and those are gross profit numbers. Yes there will likely be some changes to that once you get all the way to the bottom but cost of goods sold is already taken out of that.
  • 3 1
 @bman33: nope, Shimano had 169% increase in operative income, Dorel operative profit was USD 21.8M versus a USD .6M last year...the article doesn't mention the others but I would expect something similar.
  • 5 2
 @bman33: Nope, I pulled the financial statements and compared gross profit. Net profit may change a bit, sure but these increases include cost of goods sold.
  • 2 0
 @wilsonians: Agreed, not seeing how SG&A would proportionally increase.
  • 2 0
Some companies have been very.. how you say... creative about how they’re maintaining their margins. I saw a recent example of a roll of paper towel that previously had 140 sheets, now has only 120 for the same price. No obvious price increase but the consumer is getting less for the same cost.
  • 1 0
 And yet they're gutting our industry and staff programs. Thanks Fox and company.
  • 3 3
 @serviceguy: Income does NOT equal profit. Doral, they everything from tricycles to appliances. Difficult without deeper analytics to determine their bike only sectors, though no doubt higher this years.
  • 1 0
 @wilsonians: makes some sense. I would have dig in myself. That said, I was thing originally profit margin, not just YoY comparison. I stand a bit corrected
  • 8 0
 @brycepiwek: Less spokes, less knobs, a 29er that is actuall 28.5, 800mm bars that are only 780. Measure your gear! Smile
  • 4 0
 I presume that part of there record profit came from sales of goods that were made before raw material and freight increases. And production and shipping is more expensive now. So prices need to increase. Please shoot me down with facts and figures as I would like to know
  • 10 1
 Just so we are all VERY clear...these numbers are YEAR-OVER-YEAR. Last year during this quarter (as the article mentions), the whole world economy went into collapse and people weren't spending money as they normally would. So, compared to LAST YEAR (not last quarter) these increases look huge, but that's not an honest, holistic take on the situation.

I don't like getting gouged by companies, but to look at the YOY and then imply the companies are being villainous and greedy just doesn't feel like a fair or honest take.
  • 2 0
 @matadorCE: Stop buying new.
  • 3 2
 I think what you want is net profit, gross profit doesn't take into account any of the stuff you mentioned. Even better is to use EBITDA and figure in the additional costs on a long term basis.
  • 1 0
 @wilsonians: Take into account that on Q-Q basis (probably even YoY) the cost of goods sold number will be low through traditional accounting. Their inventories have been shit for a while. Might dig through Leatt or Dorrels statements at some point myself but this stuff is interesting!
  • 2 0
 @noplacelikeloam: selling expenses was up 2.5% general and administrative was up 27%
  • 1 0
 @brycepiwek: like how a 5500$ bike comes with a fine SX drivetrain....
  • 5 1
 @wilsonians: the % that matters to your argument isn't growth, but margins.

GP is up but so is revenue. To tell whether they're really making more profit proportionally is in the margin.

Saying they're making more profit when they're making more revenue is like "no shit".
  • 3 4
 its revenue, not profit. There is a large difference.
  • 1 2
 Collectively fleeced by bike assemble companies? Let’s hope they have some morels
  • 1 0
 @brycepiwek: drink companies have been doing this for years. There was a time when each bottle was actually 600ml not 591
  • 2 1
 @bman33: If they keep seeling the same products, and they do, doubling your revenue will more than double your profits, since your total cost of operation will not double. Simple economics of scale. You get lower cost per part due to higher numbers and your overhead will stay nearly identical.
Easy example:
You make 100.000 chains a month. They cost you 8€ of labour+machine costs+materials each. You sell these chains for 15€ each, but you do not get to keep the 700.000€ you just made, because you have to pay your overheads. Management and RnD cost you another 500.000€ per month.

Now you double your sales and hire a manager to overlook the additional manufacturing department. The manager costs you another 100.000€ a month. The higher utilization of your machines will push the manufacturng cost of your chains down slightly.

THIS IS OF CAUSE AN OVERSIMPLIFICATION, but the gist of it still applies.
  • 3 2
 @wilsonians: f*ckin whaaaaaaaaa! don't buy their shit then!? They charge what you will pay. period. They don't charge what you *feel* they should charge.
  • 4 1
 Guys I pulled some more because everyone has issues with the first numbers but didnt want to go pull any others Smile and yes you kind of have to look at Q vs Q because of seasonality of sales. Yes, this does not paint the whole picture....but every bike company out there is making record sales and record profits, despite the apparent untenable cost increases they keep talking about.

Net Income = earnings after COGS, expenses, taxes, interest etc. have been taken out.
Profit margin = net income/total sales

Fox: 360% increase in net income ($37.98mm up from $8.7mm) and +10% profit margin
MIPS: 166% increase in net income (32mm up from 12mm) and +18% profit margin
LEATT: 468% increase in net income ($2.1mm up from $362k) and +11.2% profit margin
  • 1 0
 Were being mugged hahahah
  • 3 0
 Dude if consumers are willing to pay high dollar and still keep sales up, why not?
  • 1 0
 @cougar797: I dont disagree with that. I think what is irritating is the only thing we hear is "oh costs have gone up dramatically, shipping etc etc. this is why we need to increase rates yada yada" Just say it like it is..."yeah, costs have gone up a lot, yet even with that we are making money hand over fist and its been great since we are passing it to you. Cheers to you guys out there". They make it seem like its this huge burden on their business and they can't sustain the cost increases.
  • 2 0
 I wonder what we'd all be saying if the companies we worked for increased YoY profits by 30-50%?

Would we be complaining?

Probably not. We'd be enjoying increased job security, maybe a pay rise, and feeling a ton happier than we might have been at the end of a difficult year.

The bike industry is just that - an industry - it's there to make money and maximise profit.
  • 1 0
 @brycepiwek: That has been happening for a long time, the most obvious example I've found is cheese. 2lbs blocks (907g) became 750, then 600g (that might not be the exact progression).

The smaller packages are an easier sell than higher prices. I guess the same has been happening in the bike industry.
  • 1 0
 @wilsonians: with those three companies I wonder how much of the sales increase is a result of cycling. All three cater heavily to moto and fox has a huge stake in desert racing and such
  • 23 6
 They are milking us like cows
  • 6 2
 Nope, buying these items is a free choice some people are doing.

There could be different problems, specially for local shops, in the future but companies are just rising prices accordingly to the market. At least that’s what those numbers are telling.

Maybe there’s a good chance for some brands to absorb the cost increase to attract more clients or for investing in new brands with that perspective. The second is harder because this situation looks temporary (fortunately for us in lower income countries)
  • 4 0
 Yet all we hear is complaining about not being able to buy stuff. It seems the cows are verging on mutiny for want of being milked.
  • 3 0
 I like being milked!
  • 2 0
 Buy stocks and profit from companies milking people ;-)
  • 11 0
 Don't let the manufacturers know, with these record sales figures, they will inflate the prices even more! Prices have gone crazy in my opinion now. Bikes are becoming the new cars, bought on finance etc because they are becoming prohibitively expensive and they know the majority of people are willing to buy now, pay later!
  • 5 0
 With current delivery times, it's more a matter of paying now and receiving maybe possibly somewhere in the next year
  • 3 0
 So what's your plan for not telling the manufacturers that they are making a lot of revenue based on the numbers that they themselves published?
  • 1 2
 True on the one hand, the most expensive bikes are blasting through the ceiling. But we are also seeing the effects of all the expensive advancement of technology and geometry working their way down to less expensive builds -- the value bike field test is a great example of this. So, yes, it's more expensive to buy the SWorks/9.9/Turq, etc version of things, but proper quality entry-level full-sus bikes are more accessible than ever.
  • 7 0
 Seems like the trails have gotten a lot quieter the last few weeks. The weather has been beautiful and the trails dry, but all the sudden I’m not seeing anyone in places that were packed a month ago.

It’s just anecdotal of course. But I’m starting to think the boom has peaked. Anybody else experiencing this?
  • 3 0
 Yes, seeing the same here in the NorCal Bay Area.
  • 9 0
 Bars are open again.
  • 1 0
 @Lokirides: That’s what I’m thinking too.
  • 1 0
 States are opening back up. Kid sports are going again, even in very restrictive places like CA. It was inevitable that once Covid died down, we would see this.
  • 1 0
 @bob-oso: Definitely expected it all along. But I didn't expect it to be this soon, this sudden, or this dramatic. I was out for 3 hours and didn't see another bike Saturday!

I doubt anything will be well stocked until winter, but the scrounging should be a lot easier come July.
  • 2 0
 Seeing the same thing near my house. There is a newly built bike park I drive by a couple times per day. When there should be a bunch of people biking, I don't see very many. Based on some recent plane flights (which every seat was taken), many are finding other things to go/do rather than biking compared to same time last year.
  • 10 0
 Wow, now you will get to pay more for the bike you will never get.
  • 13 9
 I think we can all appreciate a company doing well. Making profits, expanding, more jobs, better products, etc. The issue here is that the delays they speak of and cost increases in shipping are all associated with being in bed with oversees slave labor manufacturing.

There isnt a single component on a bike that cant originate and culminate in America (or at least North America). We need to stop being dependent, and reclaim our work ethic and pride. If we are going to pay higher prices, it should be for made in America / North America industry.
  • 17 2
 Sounds nice. You should start your own US based company and carry out some of what you proposed.
  • 1 0
 Is it even possible to build a bike with entirely NA domestic components right now? Sounds like a challenge, even allowing for, say, 5% total bike weight in overseas sourced parts (bearings, cables, etc.) and maybe it doesn't have to have suspension...or gears.... ah never mind.
  • 3 0
 Never going to happen. North Americans don't earn enough to buy things made at North American labour rates.
  • 2 3
 What parts are you suggesting are made by slave labour? Unless I am misunderstanding you and you are actually very enlightened and consider the CNC machines as "slaves"? Right-on. Free the CNC machines!
  • 1 0
 @G-Sport: you have think beyond just assembly. Most things that are made in North America are really just assembled in North America. To go from raw material to final product staying domestic the entire way right down to the plastic spools the welding wire is wrapped on... Your basic $1500 hardtail would suddenly be $7000 just on the increased labour costs
  • 2 0
 @Jheitt142: I see what you did there
  • 1 0
 @G-Sport: Dude... there are only a couple components on a bike that are CNC'd. The cassette/chainring (high end), and the stem.
  • 2 0
 @Baller7756: No. A huge proportion of bike manufacture is CNC. Nearly every part of a fork, rear-shock, hub, crank, BB, Headset, dropper-post, pedal, seat-clamp etc has at least some CNC in it. Even frames which are most likely hand welded will have a CNC headtube, BB shell and for full sus bikes suspension pivot housings.

The idea that anything in the bike industry is made by "slave labour" is pretty ridiculous, this is the kind of crap that was propagated (with zero evidence) in the early 90's. Wasn't true then, isn't true now.
  • 1 0
 @G-Sport: every part you just listed contains just as many rolled and cast parts as machined. CNC is still very labour intensive 90% of the work is done by a human and as a person who worked in a casting plant, the machining side actually takes more labour hours then the casting side. no one is saying slave labour, but if you think overseas labour costs anywhere near domestic, you're in for a shock.
  • 2 0
 @Jheitt142: Baller7756 literally said "slave labour" and that was the point I wanted to address.
Bear in mind, I have been to Taiwan multiple times and been round a lot of these factories so I am not just pulling this out of my arse. The levels of automation are much higher than you might expect, the Die-cast lowers of a Rockshox fork having all the flash lines etc polished back by a robot arm with zero human intervention might be a good example that you could relate to.
Yes their labour costs are somewhat lower than many parts of the US but the real difference is the investment in advanced manufacturing and the economies of scale and the synergistic benefits of having lots of industry focussed on bikes.
  • 7 4
 With E-Bikes now being $15k each not hard to see how numbers are through the roof. Would love to see unit sale numbers across different price bands (never going to get that, but would be nice to see in order to determine how long this boom is going to last).
  • 2 0
 not really, Kenevo itself represents less then 1% of total bikes sales, with includes a lot of city bikes, that is being used as a public transport or for daily commute for individuals, those are still expensive.

Also ebikes have higher YoY due to start from 0 , marked being developed over last 5 years, not 50
  • 7 1
 I wish my salary increases the same as the bike prices. Some things are almost 50%-80% more expensive than 4 or 5 years ago
  • 5 0
 So Shimano is still actually selling something. My consumer exp after 2h of searching the internet for a groupset left me dazed
  • 8 2
 Every BOOM has a BUST don't fall for it.
  • 14 1
 Some booms, like the Vancouver housing market, have been inflating for almost 40 years without a bust. That's a long time to wait!
  • 4 0
 @woofer2609: Toronto housing inflation is a reason why I escaped from the country...
  • 2 0
 @theoskar57: Smart move!
  • 4 2
 @woofer2609: Real estate is selling finite resources (limited land area), that's why there's only market corrections before inevitably going back up.

Consumer goods are a completely different story.
  • 2 3
 @Jamminator: the market for raw land in a lot of areas hasn’t gone that crazy compared to the structures. At least in places with restrictive zoning laws that make development costly.
  • 1 0
 @Jamminator: exactly. Housing is a necessity, fancy bikes are a luxury. The London property market is another prime example. 'Buy land, they don't make it anymore'.

Will be interesting to see where the bike industry settles in the next few years.
  • 1 0
 @iantmcg: I haven't priced out raw land in a long time. I could see that it is less prone to inflation, as the capital required for a down payment is 50% vs. the 5 or 10% down payment required for a property with a structure on it.
  • 1 0
 @woofer2609: I imagine it is real market dependent. Where I live the government restricts developable land through the use of a UGB which prevents sprawl. The downside is the land that is left has been cherry picked already so available land for development generally has fairly serious issues and costs to make buildable, thus unless you snooker an amateur people aren’t gonna pay a ton for your raw land.
  • 5 0
 I'm so glad I have two bikes I like.
  • 2 0
 I sold off everything except for two bikes. I like them both, and hope that continues for a LONG time.
  • 1 0
 I’m hoping there will be deals in a couple years after the supply chain stabilizes and demand wanes. I still like my 2014 so worse case scenario is I ride it for a few years then pay way too much for a bike. Best case is I get a screaming deal.
  • 2 1
 We are basically all pet owners. Some of us have been bike freaks since the schwinn stingray boom, or bmx or mtb or you just got into it recently and welcome aboard. But what we all have in common is the passion for the bike, the industry knows this and much like any pet owner will spend any amount to have their beloved pet cared for at the Vets office, we, at least the majority of us, will continue to feed and fuel the industry growth through our demand at "any" cost. Or we could all stop purchasing bikes and get into fly fishing to slow their roll. Imagine a PINKROD review of the latest 7 foot 4 weight nano carbon yadda yadda how awesome the comments would be!!! ONLY nine eyelets.....the reel seat ONLY comes in anno gold....NO bottle mount.... it is great to be alive folks, enjoy that ride!,
  • 1 0
 The shipping companies and bike manufacturers (and shops to a certain extent) have had a taste of the profits they can make with higher prices and greater profit margins. The demand still hasn't decreased. There won't be any "going back to normal"
  • 2 0
 Love how they threw in “especially high demands for cannondale” Who’s riding these bikes?! Only cannondales I see are Lefty-equipped bikes from 10 years ago being ridden by old dudes with white scruff.
  • 1 0
 I'm more interested how that numbers will be in 6 month, since absence of supply will roundup for average margins;
Also I belive next budget test will be 3-4k bikes rather 1-3 k
  • 1 1
 Curious what YoY numbers were last year, Q1 2020 vs Q1 2019. We were hardly into COVID, if anything people were probably spending less in March because no one knew what was going on? Would be nice to know if Q1 2020 is a good proxy for a normal first quarter, or does it make Q1 2021 just look that much more bloated?

More telling would be a multi year trend.
  • 4 1
 Woops - I totally missed:

"This is somewhat misleading though as the first quarter of 2020 that these results are comparing to was a turbulent one as the world reacted to the rapid spread of COVID-19 with factory shutdowns and the strictest lockdown periods of the pandemic."

I thought most lockdowns started mid/late March. But more or less confirms my suspicion. I would take these growth numbers with a grain of salt.
  • 3 0
 Any news on increases in giving to all the trails that generate all this revenue?
  • 4 0
 Warrantied every ep8 we’ve had before 600 miles.....
  • 1 0
 out of interest , as i have one, do the main bearings wear out ? Like the BB ones .
  • 1 0
 @pigman65: would seem that the dozen or so we’ve done have been torque sensors
  • 1 0
 @Eholm522: thanks
  • 2 0
 Once the covid shortages have ended, we'll see lower prices from economies of scale...right?

Bikes and components and still too expensive, covid or otherwise.
  • 1 0
 The availability issues are pushing more people to direct sell and internet shopping. I just bought a bike online because my LBS was telling me it would be August 2022 to get one!
  • 3 0
 ....Now that sales are up, could prices come back down a bit?
  • 8 0
 raw goods are still costing more and more, same with labor. Good luck Frown
  • 4 2
 Hopefully all these scrubs git gud quick and push for more mtb infrastructure
  • 3 0
 Why didn't you show us Fox's revenue in Yen? Cmon Smurthwaite
  • 3 0
 I expect bike thefts to remain stable.
  • 2 0
 Why has Shimano’s stock been flat since I bought it 8 months ago? Come on!
  • 2 0
 I have lots of food, water and bullets stocked. I have been waiting for the end times as I have read they are near
  • 2 0
 'We're posting record profits, expect price increases!" GFY, bike industry.
  • 2 1
 GoPro lucked out with the pandemic, otherwise I think they would have gone under. Same for Dorel.
  • 2 0
 It’s my bike and I want it now!
  • 1 0
 someone please make instagram but for bikes only. You’d be an instant millionaire.
  • 1 0
 Hmmm we should see an equally equivalent growth in trail work then i suppose...... CM!
  • 1 0
 Professional bicycle mechanics need to start getting livable wages. Let's start there...
  • 1 0
 Manufacturers should release a Q1 comparison with 2019 financials - that will tell the real growth story.
  • 1 0
 I feel a lot better reading the financial news, in the comments, on pinkbike. Whew.
  • 2 1
 So who's attending the investor calls?
  • 1 0
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