Revenue Round Up: Strong Signs for the Bike Industry Following a Surge in Cycling Sales

Shimano Stock hits Record High


As people turn to bikes to avoid public transport, especially in the UK and France, the Japanese brand is poised to take advantage of the surge in demand. As such, Shimano has seen its stock rise to a record high on June 16 after a spike in cycling during the COVID-19 pandemic.

Shimano endured a turbulent start to the year as it was forced to close its factories and its stock plunged as low as ¥13,240 on March 16 but it has risen rapidly since then and hit ¥20,760 on June 16. Its previous record high before the pandemic was ¥19,300 in March 2015.

A report in Bicycle Retailer and Industry News indicates that stocks are buoyant across the industry and the B2B publication noted that Giant, Accell Group, Thule Group, Fox Factory, MIPS and Dorel Industries had shown similar patterns to Shimano.

NPD Group Claims Bicycle Sales Are Up 75%

NPD Group, a data insights company, claim that bike sales are up 75% in April with total sales reaching $1 billion in the USA. This is the first month since NPD began tracking the market that sales have exceeded $1 billion with April sales typically falling between $500 million and $575 million.

The biggest growth was noted in lifestyle/leisure bikes under $200 but hardtail mountain bikes also experienced a surge of 150%.

Matt Powell, NPD's sports industry advisor said: “For far too long the cycling industry has been solely focused on the pinnacle athlete, but these results show that a broader, family and beginner focus can reap gains. This is a silver lining, and one of the important sports retail lessons to come out of the pandemic."


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Accell Sales up 23% in May

Accell, parent company of brands including Lapierrre and Raleigh, reported a "strong recovery" of bike sales in May following a slump in April and March. Group sales were down 27% compared to last year at the start of spring however as bike shops began to reopen, especially in Germany, its largest market, the group was able to bring its net sales to within 5% of last year at the same point.

Accell noted particular demand for ebikes and cargo bikes and was able to report its production was up to 70-80% of normal operating capacity compared to normal. Despite this, it still anticipates product availability to be down in the second half of 2020 and delays in the planned introductions of new bicycle models.

Ton Anbeek, CEO Accell Group, said: “The strong recovery of bike sales in May is clearly a very positive development, yet we are still trailing behind last year’s numbers. The duration and impact of COVID-19 currently remains unpredictable and we anticipate that our 2020 results will be hampered by the ongoing disruptions in the global supply chain.

“The current uncertain environment requires us to be more prudent and this is also why we are glad to have improved our financial buffer. At the same time, we are excited to see so many European governments, cities and consumers embrace cycling post lockdown, which contributes to a bright future for our brands and our business in the post-COVID-19 era.”

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Dorel Reports a Loss Despite Increased Sales

Dorel Sports saw an uptick of 2% in sales for Q1 this year however it recorded a modest $611,000 loss, compared to a profit of $4.5 million last year. Dorel, the parent company of CSG and PCG, including brands such as GT, Mongoose and Cannondale, apparently saw spikes in sales at the end of March but had to contend with unfavorable exchange rates and retail closures throughout the quarter.

Dorel Sports is expected to record a profit next quarter as its European retaillers start to open up but it also warned that supply of bikes will be tight due to high demand.

Leatt Records Best First Quarter in Company History


Helped by the launch of its first-ever shoe line, Leatt has recorded the best first quarter in its history. The South African apparel brand reported revenues up 24% year on year to $7.5 million. As well as the success of the new shoe, Leatt reported strong sales in its body armor division too, which increased 69% to $4.1 million as people were told to reduce risks to prevent hospitals being overwhelmed.

Sean Macdonald, Leatt CEO, said: "With global headwinds from the COVID-19 pandemic expected to affect our revenues in the next several quarters, we are focused on operating more efficiently while continuing to develop our pipeline of innovative, medically proven products that define Leatt as a premium head to toe brand.

Our worldwide distributor buying patterns have been understandably conservative as they have been impacted by a range of policy responses and implementation. While the situation is extremely fluid, we are continuing to closely monitor and navigate local governmental requirements, our global customer needs, and consumer buying trends. But we also know consumers are eager to return to riding. We are encouraged that our manufacturing partners in Asia are recovering well, and that the production of stocking orders of our 2021 line of protective gear has commenced as planned. We are also encouraged to see key international geographical areas and domestic locations in the United States slowly relax lockdown measures to allow for limited outdoor activity within established distancing guidelines."

More info, here.

Dick's Begins Recovery After Tough Q1

Store closures due to the Pandemic saw Dick's Sporting Goods net sales fall by 31% year-on-year in Q1 however it is beginning to show signs of recovery and hopes to have all stores open by June 30.

The company reported a consolidated loss for Q1 that included $34 million of employee compensation and safety costs and $28 million of inventory write-downs. It did note some positives though such as a 110% increase in online sales that saw its e commerce business jump from 13% to 39% of its net sales.

With stores beginning to reopen, Dick's has announced it has restored salaries for all staff except certain executives and ended furloughs. It has also reinstate its dividend program, authorizing a quarterly dividend of $0.31 per share on the company's common stock and Class B common stock as early sales are up in Q2.