Revenue Round Up: Tumultuous Times in a Coronavirus-Affected First Quarter

May 8, 2020
by James Smurthwaite  
The long-term effects of Covid-19 on the bike industry remain to be seen, but every brand has been impacted. The Q1 financial reports are out now, and there are some notable takeaways there.

Keep in mind that the global pandemic is shifting a lot of timelines, as brands rush to fix disrupted supply chains and adjust their product offerings in response.

Shimano's Bike Sales Down 15%

Shimano XT 12-speed

Shimano reported last week that its year-on-year sales in its bike division had fallen 15.4% in Q1 while its revenue slid 26.1%. Sales across the whole company were down 12.3% with revenue down 22.3%. Total sales for Shimano across the quarter were 76,920 million yen ($724M USD) with 58,868 million ($552M USD) of that coming from the bike division.

Shimano noted that sales in Europe and North and South America took a dive from mid-March onwards, while in China they were down throughout the quarter.

Shimano said: "Corporate activities have been impacted due to factors including partial stoppages of production activities at overseas production bases as well as in-store sales and movement restrictions enacted by governments in countries where the company’s products are sold."

Despite those challenges, it looks like Shimano's introduction of a new Deore drivetrain this week is well timed to satisfy increased demand for entry level bikes in response to Covid-19.

Shimano's full summary can be found, here.

Fox's Bike Division Slips 1.8%

Fox saw a total increased sales of 14% for the quarter up to a record $184.4 million. However, digging down into the figures, that record comes from a 24.6% increase in its powered vehicle division, while its bicycle division slipped 1.8%. Its bicycle division includes Fox, Marzocchi, Race Face and Easton, and they credit the decline to "a shift in timing of OEM orders".

Even though they've recently launched a host of new products, the virus appears to have affected Fox's B2B operation as their OEM partners' bike launches and deliveries are pushed back.

Read more, here.

Smart Trainers Enjoy Boom, Peloton and Garmin Reports Increased Revenue

It wasn t warm during warm up for qualies. Everyone sought shelter from the winds even the Scottish.

As people are keeping indoors due to the pandemic, smart trainers have seen increased popularity, for example, Sigma Sports has reported a 440% increase week on week in sales while the new Wahoo Kickr sold out within hours of being released. BikeBiz is also reporting that Zwift has seen a "200% increase of miles cycled per day."

In February last year, Garmin acquired TacX, which allowed it to enter the smart trainer market and, in the midst of this smart trainer boom, it has reported a 12% increase in revenue that includes a 24% increase in smart trainer sales. Garmin is also reporting strong sales in wearables such as its Vivofit smartwatch.

Cliff Pemble, president and chief executive officer of Garmin Ltd, said: "The first quarter of 2020 was remarkably strong continuing the momentum from last year. The economic uncertainty and impact on consumer behaviour caused by the COVID-19 pandemic affects every business, and we are no exception. Accordingly, we are withdrawing our fiscal 2020 guidance. However, we are optimistic for the long term because the markets we serve and the products we offer are well positioned to thrive in the future.”

More information, here.

Peloton has described itself as "COVID-proof" as its revenues rose by 66% in Q1. Peloton is reporting that its total membership grew to 2.6 million as people hope to replicate exercise classes in their own homes. In the past six weeks alone, 1.1 million people have downloaded the company's app that offers a 90 day trial and does not require the specific bike ($2,245) or treadmill ($4,295).

More info, here.

MIPS Sales Up 25%

MIPS headquarters

Bicycle Retailer is reporting that net sales for Swedish rotational protection brand MIPS have increased by 25% year-on-year for Q1 despite some Coronavirus disruption. The brand reported sales of SEK 56 million and a profit of SEK 16 million, which amounts to a 38% increase year on year.

Max Strandwitz, president and CEO, said: “Initially, we noticed an impact on our supply chain as a large part of the world’s helmets is produced in China. The Chinese subcontractors and helmet manufacturers with which we cooperate resumed production later than planned after the Chinese New Year and have gradually returned to normal production capacity during February and March. I am glad to say we have successfully navigated us through the production challenges and at the same time been able to deliver growth despite the prevailing circumstances during the first quarter.”


  • 51 5
 After some initial concerns, Corona beer sales are skyrocketing.
  • 3 1
 So drinking piss in a bottle is really a thing?
  • 21 0
 Best thing to come out of this thing is that my 4 and 6 year-olds can now legit ride a pedal-bike.

  • 6 0
 @jeremiahwas The best thing I ever did 10 years ago was buy my kids a strider. My son at 12 regularly rides 10-15 mile (very climby) loops with me and our local group of adults. I attribute it all back to him getting on trails very young because of that balance bike. #trainingwheelsaredead
  • 7 0
 @BSheldon: balance bike didn’t do anything for my daughter. She’s 5 now and still nearly hopeless on a bike. She’s a pretty quick runner though...
  • 3 0
 @DHhack: my daughter either haha. She's still uncoordinated, but it did get her on a pedal bike much quicker so she could crash on that.
  • 5 0
 @BSheldon: Dont worry about uncoordinated daughters. My youngest at that age was always falling over herself and refused to ride a bike until she was 7. She kind of switched on around 12 and now at 16 she can climb 5.12 and rips on a mountain bike. Be patient and have fun. You never know what you'll get!
  • 3 0
 @BSheldon: yup, I’m pulling dirt out of the back of her brake lever after every “ride”.
  • 3 0
 @DHhack: Same here. My 5-year old was pretty good on Strider, but is hopeless balancing and pedaling. Now she’s on training wheels and her balance is being ignored- tipping over constantly. Sigh... soon I hope.
  • 3 0
 My 2 year old was afraid of her balance bike until last night. Was riding it all over and cried something fierce when it was time to stop and go to bed.
  • 2 0
 @DHhack: I think they kinda gotta wanna do it you know? I tried to make sure I didn’t push them into it at all (not that you did of course.) Took a while and a lot of me holding onto their handlebars while pushing them (no joke workout) but eventually they were pushing with their feet then coasting for half a second then more and more. Finally I got them pedal bikes but removed the pedals until they could handle it like a balance bike. Some reverse psychology later and they asked for the pedals back on. Some good crashes too.
  • 1 0
 @BSheldon: your son doesn’t play fortnite then
  • 2 0
 Ha snap! My three and six year old have benefited immensely from the six weeks of intensive riding we’ve been doing
  • 26 5
 On the other HAND pornhub premium membership sales are at an all time high
  • 12 0
 Maybe cause it’s FREE?
  • 4 7
 @freeridejerk888: and how would you know this
  • 33 0
 @ColeMcGinnis: what are you? Catholic?
  • 6 1
 @freeridejerk888: Nothing is free. They are selling your click information to someone.
  • 1 0
 You can look it up Fansonly sales went big
  • 4 1
I got to say that this comment about porn hub, premium being free, and your user name of freeridejerk is like the starts aligning. Lol
  • 6 0
 @kleinblake: to be fair Catholics like porn just as much as everyone else. We are talking bike porn right?
  • 13 5
 @tacklingdummy: they are selling your cum face vids to Catholic priests #coverthecamera
  • 3 0
 @WAKIdesigns: you should see mine whenever I see something that's anodised purple
  • 12 4
 @neimbc: Zwift on leg day, pornhub on arm day
  • 1 2
 @felimocl: I’ll pass...
  • 1 0
 Are you new to the world orrrrrrr just don’t visit pro hub enough @vjunior21:
  • 1 1
 How the f*ck do you not? @ColeMcGinnis:
  • 1 0
 But with a subscription you get more time. Oh wait . . .
  • 1 1
 @kleinblake: and if I am...
  • 18 0
 People can’t buy bike parts, but they’re protecting their brain when they’re beating their heads against the wall.
  • 3 0
 I am confused with the MIPS "sales" numbers. I would have assumed it was licensed technology (more of a methodoly but whatever) and that helmet companies would design it into their products.
  • 7 0
 Maybe the license operates on a percentage of sale price for each helmet or a certain fixed price per helmet sold that contains the technology. Increased helmet sales = increased MIPS sales. Completely pulled this out of my ass.
  • 1 0
 @rbarbier12: thats what i initially htought too but then the CEO mentions disruptions in OUR supply chain.
  • 1 0
 @Snowrydr01: Perhaps they work with the helmet manufacturers on the front-end to come up with an implementation of the MIPS system that works with each helmet design. Helmet manufacturers then commit to purchasing a certain volume and MIPS then produces the required bits and supplies them to the helmet manufacturer to be incorporated during the manufacturing process.

MIPS retains control of the quality of their product and integrity of their brand while possibly being able to produce the MIPS bits cheaper through a dedicated facility.

Or not.
  • 2 0
 @rbarbier12: makes sense, many far worse ideas have been pulled out of far nastier asses
  • 5 2
 "Swedish rotational protection brand MIPS have increased by 25% year-on-year for Q1"

That kind of parasitic company that sits on a patent and wait for the royalties to flow in.
  • 1 0
 For real, acting like a foundation or standards body but really just selling a product. Best part is if you say anything against MIPS then you're anti-safety, because something is better than nothing right? Gimme a f*cking break.
  • 2 0
 Their business model is working well for them, why shouldn't benefit from their innovation? Some companies make their money selling patented airbags to car manufacturers, is there any difference?

last I checked a basic helmet with MIPS is pretty standard these days. With all of the overpriced crap you can buy in the MTB market, a decent helmet equipped with MIPS is a no brainer.
  • 2 0
 These revenue numbers may be down, but on a micro scale I have never seen so many people in our city riding bikes. The local bike shop is always slammed with a line out the door for people waiting to get in, and bike racks in the store are half empty due to low inventory. At one of the better trails in our area there are LINES waiting to hit the jumps, on trails that you could ride anytime on Saturday and only see one or two people. Plus I though Q1 ended march 31st so in the US you're really only talking about 2-3 weeks max of Covid affected sales.
  • 2 0
 Agreed - shops by me are flying at the moment, while they have stock at least....

I know of a few small brands too that are currently seeing record sales numbers - combination of online supply during a period when people are more homebound and a potential reduction of options - stuffs selling out and many cant get hold of new stock as its all from Taiwan / China with demand, time scales and delivery charges all changing for the worst.
  • 5 1
 Oh Fox, of course your sales are down when your products cost as much as a small countries entire GDP.
  • 1 0
 I would expect that to show a quarter or more after new product launch not right away as its dealers and oem that make up the purchase numbers, consumers don't order directly from Fox so it takes some time to see if aftermarket isn't selling. Most likely is as they say, its put the OEM schedule to shit.
  • 1 0
 I consider Fox's pricing an insult to the european biking community. I'd never consider buying fox suspension. Take any product, they just convert the dollar price to euros which is already a 10% price increase and then they add another 20+% on top?!

The cheapest fox38 I found in european online shops costs the equivalent of 1500 dollars and that is before any taxes. Including taxes it's 1800 dollars. A fox 38 is exactly twice the price of a lyrik ultimate rc2 2021.
  • 1 0
 This has definitely been a strange time for some of us looking to get a new bike. I have saved up for a year and am looking to get either a closeout on a 2020 bike or wait for a 2021 release. Looking at the new breed of longer slacker short travel 29ers (no, I refuse to say downcountry bike. Mmm okay, that's basically what I want though). Problem is, I cannot find anything decent in stock in my area or online! Okay, let's get a frame and build one up. Nope, not in stock either. Very frustrating...
  • 2 0
 None of the numbers make sense to me. I'd figure most would be down more except the companies that are inline with stay at home orders like trainer companies.
  • 2 0
 Here in Germany bike and components sales have gone through the roof, people in the industry who have been around that long saying they haven’t seen anything like it since the early 90s.
  • 1 1
 did anyone else get confused on the Shimano SALES and REVENUE going down, but REVENUE more than SALES? whats the difference between Revenue and Sales? i thought both words meant the same, is it one of those cases that CANADIAN english has different meaning for these words? Please help me I dont work in sales anymore but i used these 2 words for more than 10 years "profesionally" thinking they meant the same.
  • 1 0
 sales refers to volume of transactions, revenue refers to money, I guess
  • 1 0
 Sales is the dollar amount of product sold. Revenue is the profit.

So if Shimano sold less product but more of it was the product that had less mark up then revenue is reduced more. Also a lot of companies are facing additional costs during COVID19: additional cleaning, paying staff full salty even though production is down, etc. So that could also lead to the difference in profits vs sales.
  • 3 0
 I looked it up:
"Revenue is the income a company generates before any expenses are subtracted from the calculation (...) Some companies inaccurately use the term "sales" and "revenue" interchangeably. However, while sales might be considered to be revenue, all revenue doesn’t necessarily derive from sales."
  • 1 0
 @ismasan: I assumed the same thing initially, then I clicked through to the (translated) Shimano report.

This from near the bottom of page 2 of Shimano's quarterly report (the same one that's linked above):
> As a result, net sales from this segment decreased 15.4% from the same period of the previous year to 58,868 million yen, and operating income decreased 26.1% to 10,298 million yen.

Quick definitions:
Net Sales = All sales - Cost of Goods Sold (COGS). COGS are usually understood as the direct cost of fulfilling those sales.
Operating Income = Net Sales - Fixed Costs. Where Fixed costs are (almost) all the other costs, like stationary, wages, rent, marketing, utilities. Operating Income is the same sort of idea as Net Profit (actually it's slightly closer to EBIT: Earnings Before Interest and Tax). See this non-tech summary from Investopedia

If I sell a 1000 XT brakes to Trek for USD40 each and it costs USD30 to produce, then my Net Sales = USD10 * 1000 = USD10,000. If all my Fixed Costs (from selling those XT brakes to Trek) were USD9,500, then my Operating Income (think: Net Profit) was USD500. It's that amount that I'd have to pay tax (etc...) on.

You'd expect the Net Sales to fall at least a bit (ie 2020 vs 2019) because while COVID wrecks businesses lots of sales contracts from Q1 will have been agreed in 2019. However, you'd expect Operating Income to fall by more, because the fixed costs can't be adjusted as fast as Sales change.

So translating the terms @jamessmurthwaite uses (above):
> Shimano reported last week that its year-on-year [Net] Sales in its bike division had fallen 15.4% in Q1 while its [Operating Income (like Net Profit)] slid 26.1%. [Net] Sales across the whole company were down 12.3% with [Operating Income] was down 22.3%.
  • 2 0
 Does the writer understand that sales and revenue are synonymous terms in financial reporting? I can only guess he's trying to say unit volume?
  • 1 0
 Maybe its time to cut prices to increase sales, for one time in history
Or change from a marketing driven industry for a real one that invest in R&D and give us real products not the same shit year after year.
  • 1 0
 Eventhough I'm good with my SRAM group. I am Shimano 12 speed curious and am thinking it'll be on everything next season and I'll probably want to try it. They'll make it.
  • 1 1
Below threshold threads are hidden

Post a Comment

Copyright © 2000 - 2021. All rights reserved.
dv65 0.013139
Mobile Version of Website