The Giant Group has reported a 9.6% drop in sales for Q1, citing inventory levels in the European and North American markets as well as the higher year-on-year comparison base as the reason.
The Taiwanese company’s sales in Europe and North America were impacted by higher inventories of entry-level and mid-range products.
A cold European spring caused a late season start and as a result, it was not possible to reduce excess stock.
E-bike sales held a 32% share of the total Q1 group sales, with Europe continuing to be the most important market for this category.
Looking at the performance of Giant Group’s own brands, Cadex, Giant, Liv and Momentum, in Q1 on a local currency basis, sales in China showed signs of encouragement.
Thanks to the recovery of consumer spending after the pandemic and the increased health awareness of Chinese consumers, the number of cyclists is increasing.
This boosted the demand for bicycle products in the mid to high performance categories to a Q1 sales increase of more than 50%.
The Q1 sales value in 2023 dropped to €598.64 million. Due to price discounts and lower production utilisation, gross margin fell to pre-pandemic levels at 21.9%.
Operating profit amounted to €50.29 million, down 27.3%.
Pre-tax net profit also reduced to €50.28 million.
Giant Group attributed this to “non-operating expenses” such as foreign exchange losses of €240,000 versus a foreign exchange gain of €690,000 million in the same period last year and an increase in interest expenses.
Read more: Mycle moves to hybrid business model and seeks new retail partners
The company is predicting a difficult 2023 for the entire bicycle industry worldwide.
Although there are many challenges in the near future, the Giant Group says the three main trends – e-mobility, eco-friendliness and fitness – will continue to drive sales of mid to high-performance products.
As for medium to long-term growth in the trade, the company remains optimistic.