Asics Corp. raised its outlook for the year after reporting strong earnings improvement in the third quarter and nine months ended September 30. Sales grew 14.5 percent in the third quarter and 23.4 percent in the nine months with healthy gains across regions.

Asics said in its financial statement, “The normalization of social and economic activities has progressed with in-person sporting events having truly reopened since the beginning of the year and people were able to move freely for the first time in several years.”

Subtracting six-month results from nine-month results shows sales improved 14.5 percent in the third quarter to ¥158.0 billion from ¥138 billion a year ago, operating profits gained 31.5 percent to ¥22.2 billion, and net profits jumped 59.9 percent to ¥15.5 billion.

Net sales in the nine months were ¥448.1 billion ($2.96 bn), recording the highest ever for the nine months ended September 30 and increased year on year in all regions and categories.

Despite deteriorating foreign exchange rates in purchasing goods, gross margins in the nine months improved by 120 basis points year on year to 51.2 percent due to optimizing selling prices and an improving sales channel mix.

Operating income in the nine months rose 54.8 percent year on year to ¥55.8 billion, also the highest ever for the nine months. As a result of efforts to lower operating expenses as well as sales leverage, the operating income ratio improved significantly to 12.5 percent from 9.9 percent of the same period of the previous fiscal year.

Net profit in the nine months rose 73.3 percent to ¥40.2 billion, also a record.

Regional Performance In The Nine Months

  • Japan: Sales increased 14.3 percent to ¥101,942 million due to strong sales in all categories. Segment income increased significantly 160.1 percent to ¥11,229 million mainly due to an improvement in gross margin, as well as due to the impact of the increase in net sales.
  • North America: Sales increased 16.1 percent to ¥87,799 million due to the strong sales of the Performance Running category and Core Performance Sports category. Sales grew 6.9 percent in local currencies. Segment income increased 33.0 percent to ¥1,900 million mainly due to an improvement in gross margin, as well as due to the impact of the increase in net sales.
  • Europe: Sales increased 19.3 percent to ¥122,212 million due to the strong sales in all categories. Sales grew 7.9 percent in local currencies. Segment income increased 21.6 percent to ¥15,274 million mainly due to the impact of the increase in net sales.
  • Greater China: Sales increased 28.8 percent to ¥61,393 million due to the strong sales in all categories. Sales grew 25.6 percent in local currencies. Segment income increased 22.0 percent to ¥13,026 million mainly due to the impact of the increase in net sales.
  • Oceania: Sales increased 16.0 percent to ¥28,805 million due to the strong sales in all categories. Sales grew 12.8 percent in local currencies. Segment income increased 18.0 percent to ¥4,956 million mainly due to the impact of the increase in net sales.
  • Southeast and South Asia: Sales increased 54.3 percent to ¥21,446 million due to strong sales in all categories. Sales grew 45.0 percent in local currencies. Segment income increased 76.9 percent to ¥4,818 million mainly due to the impact of the increase in net sales.
  • Other: Sales increased 15.5 percent to ¥38,611 million due to the strong sales of the Performance Running category and Onitsuka Tiger category. Sales grew 7.7 percent in local currencies. Segment income increased 50.3 percent to ¥4,518 million mainly due to the impact of the increase in net sales.

Among major regions in the third quarter, subtracting out six-month results from nine-month results shows sales in North America grew 13.8 percent in the quarter to ¥31,878 million while operating profit declined 29.9 percent to ¥1,400 million.

Japan’s sales in the quarter inched up 0.6 percent to ¥32,831 million while operating income more than doubled to ¥3,219 million from ¥1,230 million a year ago. Europe’s sales advanced 11.11 percent to ¥43,833 million while operating earnings rose 35.1 percent to ¥7,321 million. China’s sales in the quarter gained 12.2 percent to ¥20,980 million while operating earnings eased 3.8 percent to ¥4,536 million.

Category Performance In The Nine Months 

  • Performance Running: Net sales increased 15.1 percent to ¥227,070 million due to strong sales in all regions. Category profit increased 1.5 percent to ¥44,568 million mainly due to the impact of the increase in net sales.
  • Core Performance Sports: Net sales increased 48.9 percent to ¥61,048 million due to strong sales in all regions. Category profit increased 57.3 percent to ¥13,003 million, mainly due to the impact of the increase in net sales.
  • SportStyle: Net sales increased 46.2 percent to ¥45,958 million due to strong sales in all regions. Category profit increased 94.1 percent to ¥10,377 million mainly due to the impact of the increase in net sales.
  • Apparel and Equipment: Net sales increased 5.2 percent to ¥28,018 million due to the strong sales in the Greater China region and Oceania region. Category profit returned to profitable at ¥2,016 million mainly due to an improvement in gross margin.
  • Onitsuka Tiger: Net sales increased 40.8 percent to ¥44,874 million due to strong sales in all regions. Category profit increased significantly 101.5 percent to ¥12,918 million mainly due to the impact of the increase in net sales.

Outlook
Based on the company’s strong performance during the nine months, Asics upwardly revised its annual consolidated business results forecast and increased its annual dividend. Under the updated guidance:

  • Sales are expected to reach ¥570,000 million, climbing 17.6 percent, prior guidance called for sales of ¥550,000 million, up 13.5 percent;
  • Operating income is now expected to be ¥52,000 million, up 52.9 percent, prior guidance called for operating income of ¥46,000 million, up 35.3 percent; and
  • Net income is now expected to reach ¥27,500 million, up 38.3 percent, prior guidance called for net earnings of ¥25,000 million, up 25.7 percent.

Photo courtesy Asics