Asics America Group, which includes the U.S., Brazil and Canada, reported net income increase 16.1 percent in its fiscal year ended Dec. 31. Net sales for the year were up 13.2 percent and operating income rose 41.4 percent.
In a statement, Asics America said the fiscal year increase was largely driven by strong sales in the footwear category, including the newest addition, Asics Natural 33 Collection. Additional growth in emerging categories such as tennis and penetration in apparel and accessories also played a significant role in Asics America’s financial progress for 2012. Its volleyball and wrestling categories in the region also found success.
Asics America said it’s on pace to show continued growth in 2013 and is on track to reach its billion dollars sales goal by 2015.
As Asics continuously pushes the limits and expands its product offering beyond running we see the growth and potential to further penetrate new categories, said Asics America’s President and CEO Kevin Wulff, in a statement. We are thrilled to see the early traction we are already receiving in rising markets and it is a testament to the award winning, athletic performance products we offer.
Overall, Asics Corp reported revenues rose 5.0 percent to ¥260.2 billion ($2.6 bn). Domestic net sales increased 1.7 percent to ¥94.1 billion ($951.8 mm), mainly due to the strong sales of running shoes in spite of the weak sales of baseball wear and equipment affected by the unity of the Asics brand. Overseas sales increased 7.0 percent to ¥166.1 billion ($1.68 bn), because of the strong sales of running shoes in the Americas, Europe and the other regions.
Gross profit rose 5.8 percent to ¥113.8 billion ($1.15 bn), mainly due to an increase in net sales. Selling, general and administrative expenses increased 8.3 percent to ¥95.2 billion ($963.1 mm) because of the recording of commission paid to distributors as commission fee in line with the recording of net sales at the sales price to end consumers at the Korean subsidiary, in addition to an increase in personnel expenses. As a result, operating income fell 4.9 percent to ¥18.7 billion ($188.8 mm).
Ordinary income increased 4.2 percent to ¥20.5 billion ($207.7 mm), mainly due to the recording of exchange gain despite exchange loss was recorded in fiscal 2012. Net income for fiscal 2013 increased 9.2 percent to ¥13.8 billion ($139.4 mm), due to the recording of tax refund and interest on refund arisen from transfer pricing taxation.
By region, sales in the America region reached ¥67.1 billion ($678.8 mm), up 13.7 percent in Yen and 13.2 percent on a currency-neutral (C-N) basis. Operating income reached ¥4.8 billion ($48.0 mm) against ¥3.7 billion on a recorded basis.
In its home market of Japan, revenues rose 4.8 percent to ¥114.4 billion ($1.16 bn). Operating profits were down 23.9 percent to ¥4.3 billion ($43.5 mm).
In Europe, sales inched up 1.3 percent to ¥61.8 billion ($625.7 mm) but advanced 8.9 percent on a C-N basis, thanks to the strong sales of running shoes. Operating profits were down 5.7 percent to ¥6.6 billion ($67.1 mm) mainly due to a rise in purchasing costs, in spite of a decrease in advertising expenses.
In the Oceanic area, revenues rose 14.5 percent to ¥11.8 billion ($119 mm) and increased 14.5 percent C-N due to the strong sales of running shoes in Australia and a shift in sales to South East Asia from Japan Area to this area. Operating earnings improved 3.0 percent to ¥2.6 billion ($26.0 mm), mainly due to a rise in purchasing costs.
In its East Asia region, revenues grew 31.3 percent to ¥17.4 billion ($176.6 mm) and 31.1 percent C-N. The gain was due to the recording of net sales at the sales price to end consumers at the Korean subsidiary. Operating income dipped 12.1 percent to ¥916 million (9.3 mm) due to the recording of commission paid to distributors as commission fee.
In its Other Business segment, sales increased 6.4 percent to ¥8.2 billion ($83.0 mm) and grew 10.2 percent C-N due to the steady sales of outdoor wear under the HAGLÖFS brand and other products. The segment showed an operating loss of ¥56 million ($570,000) versus a loss of ¥204 million (2.1 mm) a year ago.
For the current fiscal year ended March 31, 2014, Asics Corp. forecasts consolidated net sales of ¥305 billion, operating income of ¥22 billion, and net income of ¥13.5 billion in the fiscal year ended March 31, 2014.
For the current fiscal year ended March 31, 2014, Asics Corp. forecasts consolidated net sales of ¥305 billion, operating income of ¥22 billion, and net income of ¥13.5 billion in the fiscal year ended March 31, 2014. That represents gains of 17.2 percent in sales, 18.3 percent in operating income and 2.0 percent in net income.
In its statement, Asics Corp. said, In fiscal 2013, ended March 31, 2013, the outlook of the global economy remained uncertain mainly because of the prolonged sovereign debt problems in Europe, despite the economy noticeably picking up in the US and some emerging nations. The Japanese economy showed signs of recovery on the back of such factors as expectations regarding economic policies following the election of a new administration, despite facing difficult conditions due to the effects of decreased exports, deflation and other factors.
In the sporting goods industry, business was steady on the back of a high level of interest in sport owing to rising health consciousness, as well as a running boom.
Under these conditions, the Asics Group continued its efforts to reinforce and expand its business on a global scale based on the Five-Year Strategic Plan, Asics Growth Plan (AGP) 2015. The Asics Group made efforts to strengthen its lineup such as launching GEL-Nimbus 14 and GT-2000, the high-function, global model running shoes onto the market and expanding the lineup of running apparel, in addition to uniting its baseball businesses under the Asics brand and handling high grade products.
On the marketing front, the Asics Group took actions to heighten the value of the Asics brand and enhance the corporate image. These included supporting marathon events held in different parts of the world including Los Angeles, at which the Asics Group was the title sponsor, supplying its products used by athletes representing their countries in various events at the Games of the XXX Olympiad, London 2012, and signing an official sponsorship deal with the French Athletics Federation.
On the sales front, the Company established marketing support companies in India and Singapore to expand sales in South Asia and East South Asia. Moreover, the Asics Group strived to expand sales through such measures as opening flagship stores of the Asics brand in London, Barcelona, Kobe and Stockholm, and opening directly managed stores of the Onitsuka Tiger brand and the HAGLÖFS brand, respectively, in Tokyo.
The Asics Group by launching Life Walker, a new series of shoes designed to enable the elderly to walk more comfortably and aimed to prevent them from receiving nursing care, expanded its business into the field of health maintenance of the elderly through exercising.
Being acclaimed for these corporate activities, the Company was ranked 18th in Interbrands Japans Best Global Brands 2013.
Furthermore, the Asics Group conducted a continuous support program A Bright Tomorrow Through Sport, targeting juveniles afflicted by the Great Eastern Japan Earthquake. The program included holding baseball events and inviting mini basketball teams to Kobe.
As an organizational restructuring of the domestic group, on January 1, 2013, the Asics Group split its businesses in Japan from the global headquarter function and transferred the Companys businesses in Japan to Asics Japan Corporation and Asics Sales Corporation, through absorption-type company split and absorption-type merger.
The Asics Group also consolidated seven domestic sales subsidiaries, together with Regional Sales Divisions within Tokyo and Kansai Branches respective Area Sports Sales Division and Area Chain Sports Division, and transferred into Asics Sales Corporation.
Through this organizational restructuring, it is aimed for the Company, as the global headquarter function, to strengthen its business management focused on global market trends and strengthen its product development capability, which is a source of competitiveness, and for Asics Japan Corporation and Asics Sales Corporation to strengthen and expand their respective marketing and sales functions in their businesses in Japan.
In its statement regarding its outlook, Asics stated, “The sporting goods industry, business is expected to remain steady on the back of a high level of interest in sport owing to rising health consciousness, as well as a running boom.
Under these conditions, the Asics Group will swiftly respond to an increasingly globalizing business environment and pursue continuous growth, by working on expanding its businesses in North America which is the largest market in the world and Latin America which is a rapidly growing market, further strengthening of its global headquarter function and reinforcing and enlarging its businesses in Japan, based on the Five-Year Strategic Plan, Asics Growth Plan (AGP) 2015.