Shimano has shown some glimmers of positivity amid the otherwise gloomy cycling industry outlook, reporting a 2.7% increase in bicycle division sales to ¥355 billion for the fiscal year ending December 31, 2025, even as company-wide net income fell 55.5% to ¥33.9 billion.
The results, published on February 10, show consolidated net sales up 3.4% to ¥466.2 billion. Operating income dropped 20.6% to ¥51.7 billion, while ordinary income was down 52.3% to ¥47 billion.
The income decline was driven primarily by a shift from foreign exchange gains to losses. Shimano moved from a ¥12.2 billion currency gain in 2024 to a ¥19.6 billion loss in 2025, the company said. As a major exporter with revenues denominated in euros and dollars, Shimano is heavily exposed to yen fluctuations. Higher cost of sales and selling expenses further reduced margins.
Within the bicycle segment, operating income fell 20.9% to ¥42.8 billion despite the top-line growth. Shimano reported higher production and distribution costs even as volumes recovered.
Shimano also confirmed it has set aside ¥7.5 billion ($48.2 million) in warranty provisions for 2026 to cover its ongoing 11-speed Hollowtech II crankset inspection and replacement program. The company reversed ¥6.3 billion of prior provisions booked for the program in 2025, noting that inspections had "made progress" and that costs are now more predictable.
Regional picture
Inventory levels in North America, Japan and Oceania have returned to "appropriate levels," according to Shimano in its Consolidated Financial Results for FY2025 document. "While the strong interest in bicycles continued as a long-term trend, adjustments of market inventories made gradual progress as a whole, although the situations were mixed by region," the company added.
European retail sales remained strong but channel stock is still "somewhat high." In China, demand for high-end road bikes showed "signs of easing," with retail sales described as "lackluster" and inventories elevated.
Despite the profit decline, Shimano raised its annual dividend to ¥339 per share from ¥309 and authorized a buyback of up to ¥50 billion in shares over the next 12 months.
For 2026, Shimano forecasts flat net sales at ¥467 billion but expects net income to recover 23.6% to ¥42 billion, citing expectations that currency effects will ease. Bicycle division operating profit, however, is projected to fall a further 9% to ¥39 billion.
It seems like while cycling's major oversupply issue may be subsiding, a return to true growth in 2026 may be challenging.
