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 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
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%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.”