Revenue Round Up: Some Success Amidst Falling Sales
Following the boom across the cycling industry over the past few years the industry is slowing down with demand falling along with revenues although not every piece of news is negative. Let's get into all the key details from brand's recent revenue reports.
Giant
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Giant has revealed that its total first-quarter operating revenue has dropped from last year's total of NT$22.3 billion to NT$20.1 billion, a 9.6% decrease. Total profits from this quarter were also down, with a total of NT$883 million instead of the NT$1.91 billion achieved in the same period last year. Giant has responded to the data in its latest report by claiming the revenue decline is "due to the impact from European and North American markets to reducing inventories plus higher comparison base with last year."
The company has also stated that sales across Europe and the US were potentially affected by high inventory of entry and mid-level products. Electric bikes made up 32% of the brand's total sales in the past quarter with the company saying that these products will drive sales for the mid-level and higher products.
Merida
![Merida Ninety-Six 2021]()
Merida has seen an increase in its operating revenue in Q1 with an increase from NT$8.2 billion to NT$8.4 billion, a rise of 2.8%. Although these were signs of positivity in its revenue figures the total profit for the quarter was down from NT$1.2 billion to NT$627.5 million.
Leatt
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After breaking records last year Leatt has reported a significant decline in revenue for its first quarter with a 46.1% decline compared to last year. Revenue figures for Q1 now sit at $13.1 million instead of the $24.2 million recorded in the same period last year. Net income has also seen a sizeable drop from $4.2 million to $1.02 million. Leatt did note direct-to-consumer sales from its own website have increased.
GoPro
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GoPro has seen a 19.4% decrease in revenue despite Nicholas Woodman, founder and CEO stating that the company exceeded expectations. In its first quarter report, GoPro found revenue fell from $217 million last year to $175 million in the period ending March 31. The brand has seen some success as subscribers have increased by 36% year-over-year with GoPro.Com revenue (this includes subscription and service revenue) rose by 7% to total $95 million.
As part of its revenue report, the brand has also revealed that it will no longer be offering a discount for anyone becoming a GoPro subscriber. Anybody who is currently subscribed will still be able to purchase cameras in the future for a discounted price.
Orbea
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For its 2022 financial report, Orbea has revealed that it secured sales of 400 million euros with profit after tax increasing by 20% when compared to 2021. The brand has also allocated more than 20% of its profits to different social action and solidarity funds that it has established.
Fox
![Fox Float X and DHX 2022]()
Fox Factory's bicycle brands (Fox Factory suspension, Marzocchi, Easton and RaceFace) saw sales drop by 30% in its opening financial quarter marking a second consecutive quarter decline when compared to the previous year. The previous quarter at the end of 2022 saw just a 1.9% drop in sales. Across the whole company revenue in Q1 was up by 5.8%.
Vista Outdoor
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Vista Outdoor has seen a big net sales increase of 23% to $496 million in its yearly reports, although the company states this was mostly down to the acquisition of Fox Racing last July.
Garmin
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Across the whole company, Garmin has reported it saw revenue decrease by 2% compared to the same period last year. There is some positivity as its Fitness segment (this includes bicycle GPS units, power meter pedals and trainers) saw an increase from $221 million last year to $245 million in the past quarter. Four of Garmin's five segments saw growth in the double digits with only the outdoor segment reporting a decline, this was a drop of 27%.
Thule
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The Thule Group has announced in its Q1 report that net sales for the quarter have declined by 26.6%% year-over-year.
The Q1 reports details net sales at SEK 2,226 million a drop from the SEK 3,034 million last year. Year-over-year net income was lowered by 47.9% at SEK 275 million, this is down from SEK 527 million.
Mips
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As demand for helmets continues to fall Mips has observed a net sale decrease of 35% compared to last year. Q1 net sales were marked at SEK 88 million ($8.5 million) a significant change from the SEK 137 million achieved at the same time last year.
Net income for the brand also saw a big drop as it totaled SEK 14 million for Q1 instead of the SEK 48 million reported in the same period last year.
Shimano
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While saying it is optimistic about the future of the bike market Shimano has found the current conditions to be unfavorable as it reports a 16.8% fall in its bike division net income alongside a 31.8% drop in operating income. Net sales in the bike division still totaled 98,298 million yen.
We will update this article as more financial reports are released.
Giant
Giant has revealed that its total first-quarter operating revenue has dropped from last year's total of NT$22.3 billion to NT$20.1 billion, a 9.6% decrease. Total profits from this quarter were also down, with a total of NT$883 million instead of the NT$1.91 billion achieved in the same period last year. Giant has responded to the data in its latest report by claiming the revenue decline is "due to the impact from European and North American markets to reducing inventories plus higher comparison base with last year."
The company has also stated that sales across Europe and the US were potentially affected by high inventory of entry and mid-level products. Electric bikes made up 32% of the brand's total sales in the past quarter with the company saying that these products will drive sales for the mid-level and higher products.
 | The e-bike segment is still growing, which will further increase average selling price and profit. Giant remains optimistic in mid- to long-term growth for the cycling industry. |
Merida
Merida has seen an increase in its operating revenue in Q1 with an increase from NT$8.2 billion to NT$8.4 billion, a rise of 2.8%. Although these were signs of positivity in its revenue figures the total profit for the quarter was down from NT$1.2 billion to NT$627.5 million.
Leatt
After breaking records last year Leatt has reported a significant decline in revenue for its first quarter with a 46.1% decline compared to last year. Revenue figures for Q1 now sit at $13.1 million instead of the $24.2 million recorded in the same period last year. Net income has also seen a sizeable drop from $4.2 million to $1.02 million. Leatt did note direct-to-consumer sales from its own website have increased.
| Although we continue to see consumer demand for Leatt products, the first quarter of 2023 was particularly challenging in terms of growth in comparison with the 2022 period. The first quarter of 2022 was by far the strongest quarter in our company's history in terms of revenue, which increased 88% over the prior comparable period. However, we are optimistic that the arrival of the spring riding season after the extended cold weather period will increase consumer participation in outdoor activities. ... Our team remains enthusiastic about the future of our brand and company as we work toward a return to delivering double-digit growth. |
GoPro
GoPro has seen a 19.4% decrease in revenue despite Nicholas Woodman, founder and CEO stating that the company exceeded expectations. In its first quarter report, GoPro found revenue fell from $217 million last year to $175 million in the period ending March 31. The brand has seen some success as subscribers have increased by 36% year-over-year with GoPro.Com revenue (this includes subscription and service revenue) rose by 7% to total $95 million.
As part of its revenue report, the brand has also revealed that it will no longer be offering a discount for anyone becoming a GoPro subscriber. Anybody who is currently subscribed will still be able to purchase cameras in the future for a discounted price.
| Capitalizing on our momentum, effective today, we're implementing an updated go-to-market strategy that restores our product pricing to pre-pandemic levels, which we believe will accelerate growth in units, subscribers, revenue and earnings. Pandemic-related challenges forced us to raise prices, but now those pressures have eased and we're stoked to make the insane performance of today's GoPro more accessible for everyone. |
Orbea
For its 2022 financial report, Orbea has revealed that it secured sales of 400 million euros with profit after tax increasing by 20% when compared to 2021. The brand has also allocated more than 20% of its profits to different social action and solidarity funds that it has established.
| After the restructuring of the board at the end of the last year and the announcement of its results, Orbea is facing future challenges with confidence and commitment. The company is looking forward to the start of a new era that will allow it to consolidate the positions achieved, continue generating wealth and sharing it with society. |
Fox
Fox Factory's bicycle brands (Fox Factory suspension, Marzocchi, Easton and RaceFace) saw sales drop by 30% in its opening financial quarter marking a second consecutive quarter decline when compared to the previous year. The previous quarter at the end of 2022 saw just a 1.9% drop in sales. Across the whole company revenue in Q1 was up by 5.8%.
| Thanks to our diversified product offerings and differentiated market position, we are pleased with our strong start to fiscal 2023 in a bumpy economic and demand environment. Our strong results were achieved despite shifting demand and changing product mix. |
Vista Outdoor
Vista Outdoor has seen a big net sales increase of 23% to $496 million in its yearly reports, although the company states this was mostly down to the acquisition of Fox Racing last July.
| As of late the cycling industry has experienced pressures exacerbated by lower consumer spending flat retail sales growth, higher import costs and elevated inventory levels at distributors and retailers, which has resulted in increased promotional activity. This environment has lowered near-term outlook, but also provided us an opportunity to reposition our platform for expanded growth … At the same time the biking industry is showing signs of relief in certain areas, for example, the inventory supply situation has been improving over the course of the last 90 days. Retailers are still sitting on elevated levels relative to historical norms but conditions are improving as the excess inventory continues to sell through. |
Garmin
Across the whole company, Garmin has reported it saw revenue decrease by 2% compared to the same period last year. There is some positivity as its Fitness segment (this includes bicycle GPS units, power meter pedals and trainers) saw an increase from $221 million last year to $245 million in the past quarter. Four of Garmin's five segments saw growth in the double digits with only the outdoor segment reporting a decline, this was a drop of 27%.
Thule
The Thule Group has announced in its Q1 report that net sales for the quarter have declined by 26.6%% year-over-year.
The Q1 reports details net sales at SEK 2,226 million a drop from the SEK 3,034 million last year. Year-over-year net income was lowered by 47.9% at SEK 275 million, this is down from SEK 527 million.
| Inventory levels typically increase significantly in the first quarter ahead of the high season. In 2022, inventory increased SEK 469 million in the first quarter. The significantly lower production level impacted the utilization rates of the Group's production units. At the end of the quarter, some 900 fewer people were active in manufacturing compared with the same time prior year. Our tried and tested model to ensure flexibility and adaptation to different production volumes is functioning well. |
Mips
As demand for helmets continues to fall Mips has observed a net sale decrease of 35% compared to last year. Q1 net sales were marked at SEK 88 million ($8.5 million) a significant change from the SEK 137 million achieved at the same time last year.
Net income for the brand also saw a big drop as it totaled SEK 14 million for Q1 instead of the SEK 48 million reported in the same period last year.
| Bike resellers in the key U.S. and European markets have continued to have higher inventory levels in April than they would like, and the season started relatively late due to the cooler weather. Despite the drop in sales shown in the first quarter, we see many bright spots going forward. Both we and the industry as a whole continue to be long-term positive about the bike market. We expect a gradual recovery of the bike market already in the second quarter and assess that MIPS as a company will return to growth in the second half of the year. |
Shimano
While saying it is optimistic about the future of the bike market Shimano has found the current conditions to be unfavorable as it reports a 16.8% fall in its bike division net income alongside a 31.8% drop in operating income. Net sales in the bike division still totaled 98,298 million yen.
| Although the strong interest in bicycles cooled as progress was made toward recovery to pre-COVID-19 day-to-day routines, interest in bicycles continued as a long-term trend. On the other hand, concerns about economic recession, including rapidly rising inflation, led to a slowdown in sales of completed bicycles, and market inventories generally remained high, despite ongoing supply and demand adjustments. |
| Overseas, in the European market, interest in bicycles continued to be high, and retail sales of completed bicycles, especially e-bikes, was solid. Market inventories generally remained at high levels, although some high-end models were in short supply. In the North American market, sales remained weak and market inventories were at a consistently high level. In the Asian and South and Central American markets, although interest in bicycles was firm, sales remained somewhat sluggish due to cooling consumer confidence on account of currency depreciation and rising inflation. However, in the Chinese market, sales remained strong, especially for road bikes, owing to the growing momentum of outdoor sports cycling. In the Japanese market, the soaring price of completed bicycles due to yen depreciation and other factors slowed the pace of sales and market inventories remained somewhat high. Under these market conditions, the Shimano Group provided products to the market, including the new product SHIMANO 105 that is a high-end model for road bikes, and sport e-bike components, SHIMANO STEPS series. |
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Must Read This Week
I've seen:
Specialized Status £2600
Specialized Stumpjumper Evo Elite Alloy £4399 (Kashima suspension)
Nukeproof Giga Deore (carbon frame) was £1999 for a period last month (gone back up now)
Nukeproof Mega Deore £2039
Specialized Enduro Comp £3499
^most of those deals can also be combined with financing or cycle to work
As much as I've enjoyed many of Evil's frames in the past, I won't buy another one unless it's heavily discounted.
Sort of, according to their published financials, they achieved higher margins in 2020 and 2021 despite "shortages."
See page 59 of the 2021 annual report. www.giantgroup-cycling.com/en/ir-financial
Cha-Ching suckas!
$$$$$$$$$$$
It's completely out of hand, and at this point it's more about prestige-pricing than it is actual cost of materials.
Honestly, I do want a good(decent?!) ebike but, I'd rather spend that amount on a motorcycle than on something that my current normal bike can do 95%; basically, instead of having two of the same, I'd rather have two very different things.
Ebikes are priced like regular bikes. Profit margins somewhere around 30-40%.
Solution: put an internal combustion engine into the ebike so that there's a viable, service based sales model.
Even stupider the CEO decided "as of now" , instead of "hey, last chance".
Give it a few years and wages will catch up and everything will be back to how it was, until then I expect lots of ‘sales’ on bikes and parts they struggle to shift.
We will need a lot higher unit volumes of exactly the same bikes that can be made year after year for at least 4 years (like motorbikes or cars) before any meaningful changes happen. That allows design costs, tooling and marketing to be spread over way more bikes to the point it becomes a really small fraction of each bike.
For example typical range looks like: Tallboy Alloy, C, CC, Hightower Alloy, C, CC, Bronson Alloy, C, CC, Nomad Alloy, C, CC, Megatower Alloy, C, CC - and then multiply that through by a tonne of different specs from NX to XX1 and Deore to XTR... multiplied by a 5 sizes... multiplied by multiple colours. You barely make more than a few hundred of any single SKU. Then after a couple years replace the entire bike, throw away the $200,000 molds and start again with a new design.
Specialized has kind of done this with the status. They've gone for a aluminium frame, a single robust workhorse spec (Fox 36 Rhythm, DPX2, NX Eagle, Codes, own-brand finishing kit) and then just banged a tonne of them out exactly the same. No gimmicky features. Very little marketing. Minimal colourways. Kept it the same for like 3 years already.
They're selling for £2600 which is a great price. What does a £10,000 160 travel bike get you that you don't get on a status? Save a few pounds and maybe the suspension, gears and brakes are a bit better. This is how we will get prices down. I'm keen for dozens of companies making dozens of bikes and dozens of specs because we get to see awesome and different bikes and a lot of competition to create the best frame and suspension designs - but this also keeps the prices super high.
CEO's response; capitalizing on our momentum, effective today, we're implementing an updated go-to-market strategy that restores our product pricing to pre-pandemic levels.
What momentum? Down? And increasing prices will fix that?
Time for a new CEO . . . .
I agree with much of what you say, but outside of the top few brands or group owned (and then it’s the group owner not the bike brand) I’m not sure bike companies fall into that kind of bracket - a few hundred mill turnover a year for some of the biggest and ten mill or less for other ‘larger’ companies don’t add up to parachute pay outs.
Here in the UK water company bosses get 2mill a year wages to pump shit into our rivers, you have individuals worth thousands of millions of pounds personally, the bike industry isn’t in the league of exploiters, especially as in the performance market it’s entirely a luxury, non essential product for middle classes to waft about on like adult children.
It’s an aggressive move from SRAM and if a large number of manufacturers adopt it shimano will be in the shit.
What Shimano lacks is MTB Di2. Sram is basically two generations ahead now.
Maybe OEM’s would make with UDH and fit a hanger to work with Shimano but I can’t help but feel if they design the frame to go UDH they will be going SRAM too.
The bonus for Sram is it means they can do direct mount. Previously that would have been essentially impossible (it would have to be done on a frame by frame basis).
Being in the US you've likely not experienced "sorry, we can't ship the item in your cart to your country." Since it's rare you'd have to order those restricted items out of country.
In Vancouver Point Roberts is an option. Ship there, take advantage of free US shipping, pick it up and cross the border. Or just drive to Bellingham. Being on the island getting off is pricey. The Seattle Clipper has (had?) some cross border options but they are $$$.
The LBS I shop at is probably one of the biggest by revenue on the island (a very bike centric island), so it's crazy to me they have to wait so long as a Shimano authorized shop. Heck, they do full fox service (including nitrogen charging etc), so I don't have to send my fox stuff all the way to Burnaby (a whole ferry ride and hour drive away to Fox Canada). Total off topic, but that's what talked me into buying a bike with a Fox shock since usually they have to be sent of to be serviced.
One of the biggest sports retailers in the U.S, stopped ordering from Bell, Blackburn, Giro and Camelbak
They started taking orders again shortly before the government shut things down for Covid.
Consolidation seems a sensible move. Rent isn't getting cheaper. Nor the cost of materials, labor & benefits.
Boycotting brands because the investment company that bought them also owns things you don’t agree with is stupid. You’d have to exclusively support non public brands.
Why? Who says that? Doesn't 'billion' work on yen?
Nobody says, "I'm a thousand millionaire". They say, "I'm a billionaire"
Enjoy the read: en.wikipedia.org/wiki/Billion
Also, I am assuming they are including all forms of electric bicycles, not just top end eBikes.
C'mon guys, can someone point me in the right direction for some online research.