“The wider MOTO and MTB industry continues to experience a variety of post-COVID issues including supply chain dynamics that have created challenging stocking and inventory issues,” said company CEO Sean MacDonald. “Although we continue to see consumer demand for Leatt products, the first quarter of 2023 was particularly challenging in terms of growth in comparison with the 2022 period. The first quarter of 2022 was by far the strongest quarter in our company’s history in terms of revenue, which increased 88% over the prior comparable period.”
Leatt saw Q1 revenue decline 46% to $13.1 million, compared to $24.2 million for Q1 2022. International revenues were $9.2 million, a decrease of 52%, while sales in the U.S. were $3.9 million, a 26% decrease year-over-year. MacDonald notes, “U.S. dealers continue to manage elevated stocking levels and adjust ordering patterns accordingly and we continue to actively grow and invest in our team of U.S. employee sales reps to reach a wider dealer base of both MOTO and MTB dealers throughout the country.” One look at a slew of postings on the MIJ job board confirms Leatt is serious about this strategy.
“Cash flow generated from operations was $5.3 million, as our team continues to focus on working capital management and cash flow during a challenging industry period, a testament to the resilience of our business model and team,” claims MacDonald. “We are optimistic that the arrival of the spring riding season after the extended cold weather period will increase consumer participation in outdoor activities which will in turn stimulate growth as industry-wide inventory levels are digested and replenished at distributor and dealer levels.
“Our team remains enthusiastic about the future of our brand and Company as we work towards a return to delivering double-digit growth,” he concludes.
