Dorel Industries of Canada, owner of bike brands such as Cannondale and GT, has said that second quarter earnings in its bicycle division will be "weaker than anticipated."
The company blamed "continued poor weather across the US, Canada and Europe…particularly in the independent bicycle dealer channel."
It also blamed discounting by competitors.
"As a result of the soft first half, full year earnings in bicycles will not, as previously indicated, exceed 2012 levels," said a company statement.
Dotel has already started what it calls a "headcount reduction" and is shedding 50 positions worldwide, which is about 5 percent of the bike division’s workforce. This will cost $2m in severance packages.
“These issues in bicycles are mainly related to matters beyond our control," said Dorel president and CEO, Martin Schwartz.
"Our bicycle products are proven and our brands remain very strong. Cannondale continues to attract both excitement and highly positive comments.
"The reality is that we are now into mid-June and the weather has not improved sufficiently which means that we will be unable to make up the accumulated year-to-date sales shortfall. With the cost reductions being implemented, we are optimistic that bicycle earnings in the second half will increase double digit over last year.”
Dorel will announce second quarter results on August 9th.