Asics reported net sales in the first nine months of 2020 slumped 13.3 percent to ¥248,206 million due to the impact of the spread of COVID-19. However, the Japanese sporting goods company lifted its outlook for the year as third-quarter results showed improvement.

Subtracting six-month results from the nine months shows Asics’ revenues in the third quarter rose 2.4 percent to ¥101,309 million from ¥98,962 million.

Operating income in the three months jumped 75.0 percent to ¥7,152 million from ¥4,088 million, and net income climbed 100.7 percent to ¥2,858 million from ¥1,420 million.

Companywide, gross profit fell 13.6 percent to ¥116,108 million due to the impact of the decrease in net sales. Operating income was down 74.1 percent to ¥3,279 million due to the impact of the decrease in net sales despite a decrease in advertising and other expenses.

Ordinary income decreased 98.0 percent to ¥259 million due to the above, as well as due mainly to the recording of foreign exchange loss resulting from the impact of the depreciation of currencies in countries with emerging economies.

The loss attributable to owners of parent was ¥3,408 million. The full year was impacted by the recording of loss on temporary closing of stores despite the recording of income tax refunds at a subsidiary in the U.S.

North America Region Sees Modest Decline In Q3
Among regions, net sales in the North American region fell 18.9 percent in the nine months to ¥48,798 million due to the impact of the spread of COVID-19. The segment loss was ¥2,666 million against a loss of ¥3,853 million a year ago.

In the North American region in the third quarter, sales were down 3.7 percent to ¥20,384 million while the region reduced its operating loss to ¥532 million from ¥1,740 million from ¥2,170 million.

In a separate statement, Asics North America (ANA) said it continued to see strong online and performance running category growth for the third quarter of 2020.  This quarter marked the second consecutive quarter for triple-digit online business growth year-over-year in the U.S. and Canada.  Further, ASICS has consistently seen online sales gains for 11 consecutive quarters in the U.S.

While the ANA region, which includes the United States, Canada and Mexico, continued to feel the negative impact of the global pandemic, there were signs of recovery, specifically in the wholesale and retail channels at key partner locations and ASICS retail stores this quarter.

Asics North America said it saw several promising trends through the performance running and Sportstyle categories. Asics’ performance running footwear in the U.S. saw growth in the mid-teens for the third quarter of 2020 compared to the third quarter of 2019.

“There is no question that we are still navigating our business through this pandemic; however, we remain positive and confident for our brand thanks to key wholesale partners and our Direct-to-Consumer team,” said Koichiro Kodama, Asics Managing Executive Officer.  “We are pleased to see that even as consumers further shift their shopping habits online, they continue to seek out our strong and innovative product offering as well as support from our knowledgeable staff, including our nationwide Tech Rep team.”

Asics North America said key accounts continued to expand their online business with Asics, and Asics increased its presence in the digital marketplace month-over-month.  Asics has seen significant growth from all digital channels and will continue to maximize these areas as consumers’ buying habits rapidly evolve.

Separately, Asics North America saw positive trends from specific trade channels that performed better in the third quarter of 2020 compared to the third quarter of 2019. Those channels included Run Specialty, Sporting Goods and Family.

This quarter, Asics introduced several new performance footwear models, including the GT-2000 9, Metarace and the Dynablast. The Gel-Lyte III outperformed in the Sportstyle category.

Other Regional Performances
In the Japanese region, net sales in the nine months for Asics decreased 23.1 percent to ¥70,987 million due to the impact of the spread of COVID-19. Segment loss was ¥1,639 million due to the impact of the decrease in net sales, as well as due to increased costs of own retail stores.

In the third quarter, Japan’s sales were down 21.5 percent to ¥23,983 million. The segment showed an operating loss of ¥130 million.

European region net sales in the nine months fell 4.3 percent to ¥68,429 million due to the impact of the spread of COVID-19. Segment income increased 163.3 percent to ¥5,447 million due to an improved gross profit ratio as well as a reduction in selling, general and administrative expense.

In the third quarter, Europe’s sales were up 26.1 percent to ¥68,429 million. Operating income rose 26.1 percent to ¥31,335 million.

In the Greater China region, net sales increased 3.8 percent to ¥30,956 million due to strong sales of the Performance Running category, despite the impact of the spread of COVID-19. Segment income decreased 17.2 percent to ¥4,258 million.

In the third quarter, China’s sales advanced 11.3 percent to ¥12,431 million. Operating profits grew 8.4 percent to ¥2,145 million.

In its smaller regions, Oceanian region’s net sales in the nine months increased 11.5 percent to ¥14,095 million due to strong sales of the Performance Running category and the Sports Style category. Segment income increased 36.4 percent to ¥1,921 million mainly due to the impact of the increase in net sales.

Southeast and South Asian regions net sales in the nine months decreased 30.9 percent to ¥6,147 million due to the impact of the spread of COVID-19. Segment income decreased 85.6 percent to ¥125 million.

Other regions net sales declined 26.4 percent in the nine months to ¥20,559 million due to the impact of the spread of COVID-19 in South Korea and South America. Segment income slumped 77.2 percent to ¥343 million.

Outlook
For the full year, Asics now expects revenues of ¥320,000 million, representing a decline of 15.4 percent. Operating income is expected to show a loss of ¥6,000 million, ordinary income is expected to show a loss of ¥9,000 million, and the net loss is expected to be ¥17,000 million.

When it reported second-quarter results on August 13, Asics expected revenues for the year of ¥300,000 million, representing a decline of 20.6 percent. Operating income was expected to show a loss of ¥14,000 million; ordinary income, e loss of ¥17,000 million, and net income, a loss of ¥22,000 million.

Photo courtesy Asics