Asics America Sees Double-Digit Q1 Gain

Asics America Group, which includes the United States, Brazil and Canada, reported sales on a currency-neutral (C-N) basis rose 10.2 percent in its first quarter ended June 30. Operating profit and net income before taxes slightly rose 0.3 percent and 1.4 percent, respectively.  

According to the financial statement from Asics Corp., sales in the Americas rose 26.7 percent to ¥21.87 billion ($222.4 mm). Operating income jumped 15.3 percent to ¥2.66 billion ($27.1 mm).

Asics said the smaller gain on a C-N basis despite the top-line growth was mainly due to an increase in advertising expenses supporting further growth later in 2013. This quarter sales increase on a C-N basis was largely driven by strong momentum in the running footwear category. Additional growth in “fast rising categories” such as tennis and Onitsuka Tiger brand also helped drive growth.

Asics America Group said it is on pace to show continued growth throughout 2013 and is on track to reach its billion dollars sales goal by 2015.
 
“In Q1, Asics America expanded its offerings with a new line of training products through a national advertising and integrated marketing campaign built around the concept of ‘Next,’” said Asics America Group President and CEO Kevin Wulff.  “The entrance into this category demonstrates our commitment to evolve the brand by continuously offering innovative and relevant athletic performance products.”
 
Companywide, Asics Corp. reported sales rose 15.8 percent to ¥76.6 billion ($779.18 mm) from ¥66.1 billion. Operating income grew 2.4 percent to ¥8.52 billion ($86.7 mm). Net income jumped 33.4 percent to ¥6.58 billion ($66.9 mm).

Companywide, gross profit rose 15.7 percent to ¥34.3 million ($348.9 mm), mainly due to an increase in net sales. Selling, general and administrative expenses increased 20.9 percent to ¥25.76 billion ($262 mm), primarily due to increases in personnel expenses, advertising expenses and Korean subsidiaries’ commission paid to distributors.

In Japan, sales inched ahead 3.9 percent to ¥27.6 billion ($280.8 mm) but operating earnings slumped 34.0 percent to ¥980 million ($10 mm), mainly due to the strong sales of walking shoes and Onitsuka Tiger shoes accompanying the expansion of directly managed sales venues, in addition to the strong sales of running shoes.

Overseas sales increased 21.5 percent to ¥54.4 billion ($553.4 mm) due to the strong sales of running shoes in the Americas, Europe and other regions and the effect of foreign exchange rates.

In its Europe division, revenues were up 18.1 percent to ¥21.44 billion ($218.1 mm), and increased 3.1 percent on C-N basis, thanks to the strong sales of running shoes. Operating earnings were down 6.1 percent to ¥3.33 billion ($33.9 mm), and decreased 18.1 percent on C-N basis. The decline on C-N basis was mainly due to a rise in purchasing costs and an increase in selling, general and administrative expenses due to new openings of directly managed stores, etc., in spite of a decrease in advertising expenses.

In the Oceania region, sales were up 23.2 percent to ¥3.89 billion ($39.6 mm) and grew 8.6 percent on C-N basis. Operating profit reached ¥1.00 billion ($10.2 mm), a gain of 14.1 percent versus the year-ago period on a reported basis although only an increase of 0.7 percent on a C-N basis. The smaller C-N profit gain was mainly due to an increase in personnel expenses

The East Asia division saw sales jump 46.1 percent to ¥4.67 billion ($47.5 mm), and grew 22.6 percent C-N. Operating profits were down 10.4 percent to ¥223 million ($2.27 mm) and dropped 23.9 percent C-N due to the recording of commission paid to distributors as commission fee at the Korean subsidiary and an increase in personnel expenses and advertising expenses, etc., at the Chinese subsidiary.

In its Other Business segment, which includes the Haglöfs outdoor brand, revenues increased 17.5 percent to ¥2.55 billion ($25.9 mm) but decreased 1.6 percent on a C-N basis. Asics said in addition to the effect of foreign exchange rates, revenues benefited from “steady sales” of outdoor shoes that compensated for “weak sales of outdoor wear under the Haglöfs brand and other products.” The Other Business segment showed a loss of ¥176 million ($1.8 mm) against operating income of ¥25 million.

Asics forecast sales for the first half of its year ended March 31, 2014 is expected to grow 21.2 percent to ¥153.5 billion, operating income to increase 23.1 percent to ¥13.5 billion, and net income 29.0 percent to ¥7.5 billion. For the full year ended March 31, 2014, sales are expected to rise 21.1 percent to ¥315.0 billion; operating income is projected to rise 31.3 percent to ¥24.5 billion, and net income 5.3 percent to ¥14.5 billion.

 

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

Asics America Sees Double-Digit Q1 Gain

Asics America Group, which includes the United States, Brazil and
Canada, reported sales on a currency-neutral (C-N) basis rose 10.2
percent in its first quarter ended June 30. Operating profit and net
income before taxes slightly rose 0.3 percent and 1.4 percent,
respectively. 

On a net basis with the benefit of the weaker
yen, Asics America net sales increase was higher coming in at 12.5
percent, compared to the same quarter in 2012, while operating income
and net income before taxes had significant increases of 27.7 percent
and 30.9 percent.
 
Asics America Group‘s double digit growth in
top-line sales and slight increase in profit levels were due to the fact
that Asics America spent more on marketing expenses in Q1 expecting
further growth later in 2013. This quarter sales increase was largely
driven by strong momentum in the running footwear category.  Additional
growth in fast rising categories such as tennis and Onitsuka Tiger brand
played a significant role in Asics America Group financial progress in
Q1 2013. 

Asics America Group said it is on pace to show
continued growth throughout 2013 and is on track to reach its billion
dollars sales goal by 2015.
 
“In Q1, Asics America expanded its
offerings with a new line of training products through a national
advertising and integrated marketing campaign built around the concept
of “Next”,” said Asics America Group President and CEO Kevin Wulff. 
“The entrance into this category demonstrates our commitment to evolve
the brand by continuously offering innovative and relevant athletic
performance products.”
 
Companywide, Asics Corp. reported sales
rose 15.8 percent to ¥76.6 billion ($779.18 mm) from ¥66.1 billion. Operating income
grew 2.4 percent to ¥8.52 billion ($86.7 mm). Net income jumped 33.4 percent to
¥6.58 billion ($66.9 mm).

In the Americas, revenues rose 26.7 percent to
¥21.87 billion ($222.4 mm), and were up 10.2 percent on currency-neutral (C-N)
basis. The gain reflects strong sales of running shoes. Operating income
jumped 15.3 percent to ¥2.66 billion ($27.1 mm), and 0.3 percent on a C-N basis.
The smaller gain on a C-N basis despite the top-line growth was mainly
due to an increase in advertising expenses.

In Japan, sales
inched ahead 3.9 percent to ¥27.6 billion ($280.8 mm) but operating earnings slumped
34.0 percent to ¥980 million ($10 mm), mainly due to the strong sales of walking
shoes and Onitsuka Tiger shoes accompanying the expansion of directly
managed sales venues, in addition to the strong sales of running shoes.

Overseas
sales increased 21.5 percent to ¥54.4 billion ($553.4 mm)due to the strong sales
of running shoes in the Americas, Europe and other regions and the
effect of foreign exchange rates.

In its Europe division,
revenues were up 18.1 percent to ¥21.44 billion ($218.1 mm), and increased 3.1
percent on C-N basis, thanks to the strong sales of running shoes.
Operating earnings were down 6.1 percent to ¥3.33 billion ($33.9 mm), and decreased
18.1 percent on C-N basis. The decline on C-N basis was mainly due to a
rise in purchasing costs and an increase in selling, general and
administrative expenses due to new openings of directly managed stores,
etc., in spite of a decrease in advertising expenses.

In the
Oceania region, sales were up 23.2 percent to ¥3.89 billion ($39.6 mm) and grew 8.6
percent on C-N basis. Operating profit reached ¥1.00 billion ($10.2 mm), a gain of
14.1 percent versus the year-ago period on a reported basis although
only an increase of 0.7 percent on a C-N basis. The smaller C-N profit
gain was mainly due to an increase in personnel expenses

The East
Asia division saw sales jump 46.1 percent to ¥4.67 billion ($47.5 mm), and grew
22.6 percent C-N. Operating profits were down 10.4 percent to ¥223
million ($2.27 mm) and dropped 23.9 percent C-N due to the recording of commission
paid to distributors as commission fee at the Korean subsidiary and an
increase in personnel expenses and advertising expenses, etc., at the
Chinese subsidiary.

In its Other Business segment, which includes
the Haglöfs outdoor brand, revenues increased 17.5 percent to ¥2.55
billion ($25.9 mm) but decreased 1.6 percent on a C-N basis. Asics said in addition
to the effect of foreign exchange rates, revenues benefited from
“steady sales” of outdoor shoes that compensated for “weak sales of
outdoor wear under the Haglöfs brand and other products.”

The Other Business segment showed a loss of ¥176 million ($1.8 mm) against operating income of ¥25 million.

Companywide,
gross profit rose 15.7 percent to ¥34.3 million ($348.9 mm), mainly due to an
increase in net sales. Selling, general and administrative expenses
increased 20.9 percent to ¥25.76 billion ($262 mm), primarily due to increases in
personnel expenses, advertising expenses and Korean subsidiaries’
commission paid to distributors. As a result, operating income increased
2.4 percent to ¥8.52 billion ($86.7 mm).

Ordinary income increased 22.5 percent
to ¥9.53 billion ($96.9 mm), mainly due to the recording of exchange gain in the
first quarter of fiscal 2014, in contrast to the recording of exchange
loss in the same period of fiscal 2013. Net income rose 33.4 percent to
¥6.58 billion ($66.9 mm) primarily due to the recording of gain on sales of
tangible assets arising from the sale of the land of former Kanto
Kashiwa Distribution Center.

Asics forecast sales for the first
half of its year ended March 31, 2014 is expected to grow 21.2 percent
to ¥153.5 billion, operating income to increase 23.1 percent to ¥13.5
billion, and net income 29.0 percent to ¥7.5 billion. For the full year
ended March 31, 2014, sales are expected to rise 21.1 percent to ¥315.0
billion; operating income is projected to rise 31.3 percent to ¥24.5
billion, and net income 5.3 percent to ¥14.5 billion.

In its
statement, Asics said, “In the first quarter of fiscal 2014 (cumulative
from April 1, 2013 to June 30, 2013), despite lingering concerns about
the risk of downturn mainly due to the sovereign debt problems in
Europe, the global economy continued to advance along a weak recovery
track and showed some underlying strength. The Japanese economy has
recovered owing to the improvements of corporate earnings and consumer
spending, result from the Japanese government’s economic and financial
policies.

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 took actions to heighten the
value of the ASICS brand and enhance the corporate image. Such actions
include launching GEL-Nimbus 15 and GEL-Cumulus 15, the high-function
running shoes, onto the market, expanding the apparel lineup on a global
level with
an emphasis on running apparel, and supporting marathon events
held in different parts of the world including Paris and Stockholm.”

On
the sales front, the ASICS Group strived to expand sales through such
measures as opening flagship stores of the ASICS brand and opening
directly managed stores of the Onitsuka Tiger brand, respectively, in
Osaka and Sydney. In addition, Retail and Leisure International’s
“International Retailer 2013” award which is intended to recognize
retailers that have achieved excellence on a global level was presented
for its retail business concept and strong financial performance.”

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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