Shimano withdraws performance guide as COVID-19 takes hold
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Tackle giant Shimano has withdrawn its financial performance forecast for 2020 because of the uncertain impact of the Coronavirus crisis on its business activities across the world.
The Japan-based manufacturer of fishing tackle and bicycle components told investors at the presentation of its first quarter 2020 results that the group has been affected by partial stoppages of production activities at overseas bases as well as in-store sales and movement restrictions imposed by governments in countries where its products are sold.
It said: “As the extent of these impacts remains uncertain, it is difficult for the company to reasonably calculate business performance forecasts at this time. As a result, Shimano has decided to temporarily withdraw the performance forecasts announced on February 12th this year and leave them as undetermined.”
For the first three months of the year Shimano reported an overall 12.3% decrease in sales to 76,920m yen compared to the same period in the previous year. Its fishing tackle sales were down 0.3% from the same comparable period to 17,976m yen. Operating income rose 1.1% to 2,391m yen.
It reported steady tackle sales in Japan as demand was stimulated by the warm winter and stable weather conditions at the start of the year. The advent of the Coronavirus outbreak affected its performance from March onwards. It added: “Under these conditions sales in Japan increased over the previous year as sales of two new products, the Metanium and TWIN POWER, as well as the popular-price range products, remained solid. Overseas sales fell short of the previous year as the Coronavirus had a significant impact.
“In the North American market sales had been strong since the end of the previous year, but then weakened almost instantaneously in March as states ordered people to stay at home and imposed restrictive measures in response to the spread of COVID-19.”
Shimano reported a similar story in countries across Europe. In Asia, the Chinese market showed signs of recovering, but in other countries across the region sales were weak. Its performance in Australia was described as ‘sluggish’ throughout the period due to the damage caused by the bushfires and floods as well as the Coronavirus.