Asics America Sales Up 18.4 Percent in Fiscal 2011

Asics America Sees 18.4 Percent Revenue Hike in Fiscal 2011

Asics Corp. said revenues at Asics America Corp jumped 18.4 percent in its fiscal year ended March 31, 2011. The growth was driven by footwear posting its highest sales figures in recent years at over 18 percent, while apparel showed an increase of almost 14 percent.

Including Canada and South America as well as U.S. figures, Asics sales in the Americas region increased 12.4 percent, or an increase of 19.8 percent using the previous fiscal year’s foreign exchange rate, to ¥59.6 billion ($733.1 mm). Segment income increased 52.2 percent – an increase of 62.3  percent using the previous fiscal year’s foreign exchange rate – to ¥4.7 billion ($557.8 mm).

Asics America’s statement also indicated that 2011 “has started out strong under the leadership of Kevin Wulff,” who joined Asics America in August 2010 and was named CEO of the region in April 2011. 

In the statement, Asics America said Wulff’s immediate goal is to “generate significant growth for 2012 and beyond with the ultimate goal of reaching one billion dollars in sales by the year 2015.” 

The statement listed three priorities for Asics America:

• Continued product innovation: 33 by Asics, its entry into the lightweight category, this year “was met with eager anticipation from retailers and consumers and sales have been beyond expectation. Innovation, as it always has been, will continue to be a key factor moving forward.”
• Improved service and distribution: Summer 2011 will bring the opening of a new 500,000-square-foot warehouse in Byhalia, MS. With a soft opening in early June and full production by the end of the summer, the distribution center is expected to “provide more square footage and the advanced level of technology required to meet Asics growing demand for years to come.”
• Internal restructure: For long-term strategic growth a new internal structure has been set up with several new key positions filled within marketing, product development and sales. The statement said these changes “are designed to improve internal communications and implement go to market integration.”

As reported, those changes included the appointment of two new senior national sales directors have been named. Mike Mitchell will handle the West and Southwest territories, including specialty retailers nationwide, and Tracy Paoletti will serve as his counterpart for the East and Midwest regions.

“In order to become a billion dollar business, we will be aggressive and strategic with every move we make,” said Wullf. “Building upon the success of our iconic footwear while innovating and designing new styles and categories will keep us in the dominant position within running and allow us to fuel growth for the Asics  brand.”

Overall, Asics Corp reported consolidated sales increased 4.9 percent to ¥235.3 billion ($2.9 bn). Domestic net sales declined 5.6 percent to ¥88,040 million mainly due to the weak sales of sportstyle shoes and athletic wear. Overseas sales increased 12.4 percent to ¥147.3 billion ($1.8 bn), thanks to strong sales of running shoes in Europe, the Americas and Australia.

Gross profit rose 9.4 percent to ¥103.1 billion ($1.3 bn) mainly due to improvements of the cost of sales ratio overseas. Selling, general and administrative expenses increased 6.4 percent to ¥81.5 billion ($1 bn). This was mainly the result of recording amortization expenses for intangible fixed assets accrued after revaluation of assets and liabilities to their fair values, in addition to an increase in advertising expenses and amortization of goodwill arising from business combination. However, operating income rose 22.7 percent to ¥21.5 billion ($265.3 mm).

Non-operating income decreased 32.0 percent to ¥1.37 billion ($16.8 mm) due in part to the absence of dividend income from affiliated companies not accounted for by equity method which was recorded in the previous fiscal year and other factors, and non-operating expenses increased 154.0 percent to ¥3.5 billion ($42.8 mm) because of factors such as an increase in exchange loss ¥2.73 billion ($34.3 mm).

As a result, ordinary income increased 6.8 percent to ¥19.5 billion ($239.4 mm). Extraordinary income decreased 98.9 percent to ¥5 million ($615,000) due in part to the absence of gain on the redemption of investments in securities which was recorded in the previous fiscal year. Extraordinary losses increased 133.2 percent to ¥976 million ($12 mm)due to factors such as the recording of a loss on adjustment for adoption of accounting standard for asset retirement obligations. Net income for fiscal 2011 rose 32.7 percent to ¥11.0 billion ($135.9 mm) due to the absence of accrual of the prior-year income taxes which was recorded in the previous fiscal year.

In other regions outside the Americas:

• Sales in the Japan area decreased 1.9 percent to ¥104,862 billion ($1.29 bn) mainly due to weak sales of sportstyle shoes and athletic wear. Segment income increased 8.6 percent to ¥5.08 billion ($62.4 mm) due to cost cutting in selling, general and administrative expenses.
• Sales in Europe increased 0.3 percent (an increase of 12.3 percent using the previous fiscal year’s foreign exchange rate) to ¥55.5 billion ($683.2 mm), thanks to brisk sales of running shoes. Segment income increased 8.0 percent (an increase of 21.0 percent using the previous fiscal year’s foreign exchange rate) to ¥8.6 billion ($105.2 mm).
• Sales Asia Pacific Area increased 21.5 percent to ¥24.1 billion ($296.4 mm), thanks to strong sales in Korea and Australia. Segment income increased 79.7 percent to ¥3.48 billion ($42.8 mm).

In Other business, sales were ¥4.36 billion ($53.7 mm) and segment income was ¥150 million ($1.8 mm) due to the acquisition of Haglöfs–FS Holding AB as a consolidated subsidiary.

Forecast