In the latest reminder of the challenging times facing the bike industry in the years since the pandemic, Giant has posted its financial results for 2024 and announced that profits were slashed by almost two-thirds last year as heavy discounting and inventory challenges hit the business.
The positive take on the figures, first reported by Bicycle Retailer and Industry News, is that sales were actually only down 7.4 per cent on 2023 and still exceeded pre-pandemic levels, Giant stating that the "over-inventory situation continues to improve, consumers are demanding new fresh products" and it is expected that the business will enjoy "profit recovery in 2025".
With that said, the eye-catching headline figure is that post-tax profit plummeted to NT$1.26bn (£29.4m) last year, a drop of 62.8 per cent compared with 2023. This was led, the brand says, by "reduction in demand" in the US and European markets, as well as the impact of "more aggressive discounts" and inventory issues. In fact, Giant stated it had an inventory loss provision of NT$1.9bn (£44.4m) in 2024 which cut its gross margin three per cent on 2023 levels.
2024 Giant TCR Advanced Pro 0 AXS.jpg (credit: road.cc)
The bike industry has faced inventory woes for a number of years now, the boom of the Covid period seeing over-ordering in response to the astronomical interest. When that slowed down brands were left with too much stock that has often been shifted at heavily discounted prices.
It has been an issue across the industry, not just at Giant. In January, components giant Shimano said "market inventories remained high" as it announced operating income for its cycling division was down 17 per cent in 2024.
> Shimano crank 'recall' cost £70m in 2024, as bicycle components giant's sales drop again amid "weak" cycling market
Likewise, Dutch company Accell Group (which owns brands such as Raleigh, Lapierre and Ghost) revealed it lost £325m in its latest accounts, 2024 a "challenging year" as the business was forced to prioritise "normalising stock levels", something it says it has now achieved.
The context to Giant's financial announcement about slumping profits is that the company still posted a healthy post-tax profit of NT$1.26bn (£29.4m), even if that figure is down almost two-thirds on its 2023 number.
2024 Cykom Giant Jayco - 1 (1) (credit: Giant)
The bike brand also released some specific figures related to the fourth quarter of 2024, showing that sales were down 8.5 per cent compared to the same time period in 2023.
On similar lines to the entire 2024 picture, Giant highlighted the challenges it faced in the final quarter of the year, namely "heavy discounts in the US and Europe as well as the soft sales performance in China, in addition, with the increase in inventory provision expenses", factors which, when combined, cut its gross margin to 13.5 per cent.
> Giant acquires Stages Cycling brand and assets, months after suing power meter and indoor bike company for £16 million
Putting a positive spin on things, Giant concluded: "Outlook for 2025, as the over-inventory situation continues to improve, consumers are demanding new fresh products, it is Giant Group's belief that after the under-expectation performance in 2024 Q4, will see profit recovery in 2025."
Giant's revenues for the first two months of 2025 were up 13 per cent on the same months in 2024, bolstered by a particularly strong February which saw sales up a third on the same month last year.
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