Following the boom across the cycling industry over the past few years it seems like the industry is beginning to slow down with demand falling along with revenues. Let's get into all the key details from brand's recent Q3 revenue reports.
Vista Outdoor’s Action Sports Group
Vista Outdoor’s Action Sports group, including its bike brands, has seen sales reaching $151 million in the most recent quarter going against the industry trend with a 44% increase compared to the same time last year.
The collection of brands includes Bell Sports, Giro, Blackburn, Fox Racing, interestingly Vista Outdoor has said that sales of Bell's lower and mid-tier helmets have struggled in the recent quarter because of high levels of inventory at retailers.
Giant Group has also faired well in its first three fiscal quarters with a 14.4% increase over last year leading to net sales of NT$70.87 billion ($2.2 billion).
The Giant Group says its OE business has increased its contribution to the sales total this year which has seen rising costs of materials, logistics and labor affect profits. Giant has also said that the stock of bikes in Europe and North America is improving for entry and mid-level products. Higher-end products are still in short supply.
In its report Giants says demand has "cooled down compared to the past two years" but it "sees the great potentials for the cycling industry."
Going against the trend for other companies in Q3 Fox has recorded company-wide sales increasing by 17.8% compared to last year. The bicycle part of the business saw sales increase by 9.1% in the quarter to $174 million. In the first three quarters of the year, the bike-related Speciality Sports Group had a 25.2% jump in sales to reach $522 million.
Following the Q3 report Fox has increased its earnings forecast from $1,565 million to $1,585 million.
GoPro has seen year-over-year revenue drop by 4% in Q3 despite increases in subscriptions.
For the quarter ending on September 30, GoPro saw revenue noted at $305 million, a decrease from the $317 million reported in the same period last year. The report did say that subscribers have increased by 55% year-over-year reaching 2.1 million. The subscriber increase has helped to grow subscription and service revenue by 48% compared to 2021 and achieved $21 million in Q3.
Shimano's third fiscal quarter financial summary sees signs of consumer interest in bikes cooling but demand remains higher than it was before the pandemic.
In its Q3 report, Shimano has revealed that inventory for high-end bikes remains low with higher demands compared to lower-end bikes which have seen a drop in interest. Shimano did not note that in Europe despite some shortages inventory levels are reaching decent levels.
Shimano found in the first three-quarters of the year sales of components were up by 20.6% compared with the same time last year to reach 384,654 million yen ($2.59 billion). The companies operating income rose to 109,119 million yen, a 21.6% increase. Q3 sales saw a jump of 25.7% over this period last year.
MIPS has stated a reduction in demand for bike helmets has led to its third-quarter sales decreasing by 39% year-over-year.
Third-quarter net sales reached SEK 113 million ($9.9 million), a drop from the SEK 185 million achieved in the same period last year. It will not only affect this quarter as MIPS president and CEO Max Strandwitz has stated that it could continue for the rest of 2022 and into the new year.
"Bike retailers around the world have generally built up too high inventory levels of bikes and bike accessories and therefore helmet manufacturers pulled the hand brake in terms of helmet manufacturing ahead of next season.
"We believe that this sub-category (bike) will return to growth driven by strong trends in e-bikes, commuting and people wanting to spend more time outdoors. We still see a high interest from our customers wanting to launch new products within the bike sub-category. Therefore, we are confident in our continued investments in bike."
The lower third-quarter results were expected by MIPS as last month the company predicted a revenue decrease with Max Strandwitz stating this was because "we realized that we had underestimated the speed and the magnitude of the slowdown in the bike sector."
Garmin has seen a 4% year-over-year decrease in its latest report with the Fitness segment dropping by 18%.
The decrease in revenue is said to be caused by lower demand for indoor cycling and advanced wellness products as the latest quarter reports a drop from $1.19 billion last year to $1.14 billion. The Fitness segment which includes GPS devices, power meter pedals, indoor trainers and more fell from $342 million to $280 million.
The Thule Group has seen net sales drop by 23% year-over-year as high stock levels lower demand for bike products.
Third-quarter net sales for Thule reached SEK 2.13 million ($196.3 million), a fall from SEK 2.77 million last year although this was in line with a mid-quarter financial statement from CEO and President Magnus Welander.
Following the report CEO and President Magnus Welander said: "The coming quarters, as already communicated, we will be facing a challenged market with a greater uncertainty in regards to how consumers' purchasing desire is impacted in an uncertain world as well as retailers that will strive to keep inventory levels low."
Earlier this month Thule's Americas division laid off 34 employees across management, product development, and manufacturing divisions.
We will continue to update this article as more revenue reports are released.