Asics America widened its loss in the fourth quarter but saw earnings improve significantly in the full year.

In the quarter, the region showed an operating loss of ¥1.97 billion against a loss of ¥858 million in the same period a year ago. The quarterly figures were derived by subtracting nine-month results from full-year results.

Sales in the American region in the quarter slid 7.2 percent to ¥23.9 billion from ¥25.7 billion.

For the year, sales in the American region decreased 6.0 percent, or 7.7 percent on a currency-neutral basis, to ¥106.2 billion, due to weak sales in the U.S., according to Asics’s yearly report.

Segment income in the year jumped 173.6 percent, or 168.6 percent on a currency-neutral basis, to ¥2.36 billion, mainly due to an improved cost of sales ratio, as well as a decrease in provision of allowance for doubtful receivables. The prior year was impacted by a number of bankruptcies, including The Sports Authority.

Companywide, sales in the quarter increased 3.8 percent to ¥89.9 billion. The Japanese company showed an operating loss of ¥4.85 billion against a loss of ¥4.0 billion in the same period a year ago. The net loss, however, shrunk to ¥2.8 billion from ¥3.1 billion.

For the full year, Asics reported consolidated net sales increased 0.3 percent to ¥400.2 billion while decreasing 2.0 percent on a currency-neutral basis.

Domestic net sales decreased 0.5 percent to ¥101.1 billion mainly due to weak sales of sportswear, despite steady sales of running shoes. Overseas sales increased 0.5 percent (a decrease of 2.6 percent on a currency-neutral basis) to ¥299.1 billion, mainly due to weak sales in the American and European regions, despite strong sales of running shoes and Onitsuka Tiger shoes in the Oceania/Southeast and South Asian regions as well as the East Asian region.

Gross profit increased 3.8 percent to ¥183.3 million, mainly due to an improved cost of sales ratio.

Selling, general and administrative expenses increased 8.4 percent to ¥163.7 billion due to increased costs in line with the expansion of own retail stores and increased costs related to the rollout of various digital strategies. As a result, operating income decreased 23.2 percent to ¥19.6 billion

Ordinary income decreased 7.1 percent to ¥21.7 billion due to foreign exchange gains recorded in the latest year compared to foreign exchange losses posted in the corresponding period of the previous fiscal year. Net profits slumped 16.7 percent to ¥12.97 billion mainly due to the recording of an extraordinary loss owing to business restructuring in the European region.

In other regions, sales in the Japanese region decreased 0.4 percent to ¥119.46 billion, due to weak sales of sportswear, despite steady sales of running shoes. Segment income decreased 6.3 percent to ¥5.89 billion, due to the effect of the decline in sales, despite an improved cost of sales ratio.

In the European region, sales decreased 1.2 percent (a decrease of 5.4 percent on a currency-neutral basis) to ¥106.3 billion, due to the effect of changes in the retail market and intensifying competition. Segment income decreased 26.6 percent (a decrease of 29.8 percent on a currency-neutral basis) to ¥8.3 billion mainly due to the effect of the declined sales.

In the Oceania/Southeast and South Asian regions, sales increased 15.1 percent (an increase of 9.5 percent on a currency-neutral basis) to ¥27.7 million, due to the strong sales of running shoes and Onitsuka Tiger shoes. Segment income increased 11.7 percent (an increase of 6.4 percent on a currency-neutral basis) to ¥4.06 billion.

In the East Asian region, sales increased 13.0 percent (an increase of 10.4 percent on a currency-neutral basis) to ¥49.1 billion, due to the continuing strong sales of running shoes and Onitsuka Tiger shoes in China, despite lower sales in South Korea due to restructuring current retail stores. Segment income increased 2.0 percent (an increase of 1.2 percent on a currency-neutral basis) to ¥5.1 billion.

In the Other Business segment, sales increased 0.8 percent (a decrease of 1.3 percent on a currency-neutral basis) to ¥9.2 billion, due to weak sales of outdoor wear and other items under the HAGLÖFS brand. The segment loss was ¥253 million.

For 2018, companywide sales are expected to climb 6.2 percent to ¥425 billion. Operating income is expected to reach ¥20 billion, up 2.2 percent and net profit, ¥12 billion, off 7.5 percent.

Photo courtesy Asics