Shoei (7839) Q4 2024 earnings summary

Executive summary

• Net sales rose 6.5% year-over-year to ¥35.79 billion, driven by higher unit prices despite an 8.4% drop in units sold and a weaker yen.

• Operating income increased 5.1% to ¥10.33 billion, and net income grew 4.4% to ¥7.38 billion year-over-year.

• North America sales volume increased 42.0%, while China sales volume dropped 32.5% year-over-year.

• Inventory overhangs in Europe and China are being addressed, with gradual demand recovery in some regions.

• Net sales and profits rose despite lower unit sales, supported by new model launches and price increases.

Financial highlights

• Net sales: ¥35.79 billion (+6.5% year-over-year); operating income: ¥10.33 billion (+5.1%); net income: ¥7.38 billion (+4.4%).

• Gross profit: ¥16.12 billion; gross margin improved due to price increases and new model launches.

• Cash and cash equivalents at period end: ¥15.35 billion, up from ¥14.77 billion.

• Net assets increased to ¥29.55 billion; net assets to total assets ratio improved to 84.2%.

• Dividend per share for FY2024: ¥70 (up ¥4 year-over-year); planned FY2025 dividend: ¥59.

Outlook and guidance

• FY2025 forecast: net sales ¥33.92 billion (-5.2% year-over-year), operating income ¥8.77 billion (-15.1%), net income ¥6.22 billion (-15.7%).

• Sales volume expected to decline in all regions except China; net sales to be significantly affected by yen appreciation.

• Sales expected to decline in Japan and Europe, remain stable in North America, and edge up in Asia.

• Forecast assumes average FX rates of ¥145/USD and ¥160/EUR.

• Net sales and operating income are forecast to decrease due to a projected 4.0% drop in units sold and yen appreciation.