Asics Corp. reported revenues grew 21.4 percent in the first six months through Sept. 30, to ¥153.66 billion ($1.56 bn) from ¥126.6 billion a year ago. The gains were due to strong sales of running shoes in the Americas, Europe and other regions and the effect of foreign exchange rates. On a currency-neutral basis, sales grew 12.0 percent in the Americas and gained 7.3 percent in Europe. Sales dipped slightly in Japan.
Earnings rose 36.3 percent in the period to ¥7.92 billion ($80.2 mm) from ¥5.81 billion a year ago. The income increase was primarily due to the recording of gain on sales of property, plant and equipment arising from the sale of the land of former Kanto Kashiwa Distribution Center.
Domestic net sales increased 3.9 percent to ¥45.1 billion ($457.0 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 and baseball equipment. Overseas sales increased 30.5 percent to ¥108.56 billion ($1.1 bn) due to the strong sales of running shoes in the Americas, Europe and other regions and the effect of foreign exchange rates.
Gross profit rose 25.6 percent to ¥68.6 billion ($695.2 mm), mainly due to an increase in net sales. Selling, general and administrative expenses increased 25.4 percent to ¥54.7 billion ($554.7 mm), primarily due to increases in advertising expenses and Korean subsidiaries’ commission paid to distributors. As a result, operating income increased 26.4 percent to ¥13.86 billion ($140.5 mm).
Ordinary income increased 40.0 percent to ¥14.0 billion ($142.0 mm), mainly due to a decrease in exchange loss. Net income rose 36.3 percent
to ¥7.92 billion ($80.3 mm). Operating income improved 26.4 percent to ¥13.9 billion ($140.9 mm) from ¥11.0 billion.
In its home market in Japan, sales slipped 1.5 percent to ¥44.8 billion ($454 mm) from ¥45.5 billion. Operating income dropped 42.6 percent to ¥1.43 billion ($14.5 mm) from ¥2.49 billion.
In the Americas, sales jumped 33.2 percent to ¥46.2 billion ($468.2 mm) from ¥34.7 billion, due to the strong sales of running shoes and the effect of foreign exchange rates. Sales gained 12.0 percent on a currency-neutral basis. Operating income jumped 59.4 percent to ¥5.1 billion ($51.7 mm) from ¥3.2 billion, and climbed 33.7 percent on a currency-neutral basis due to improvements of the cost of sales ratio .
In Europe, sales reached ¥39.9 billion ($404.3 mm), up 29.0 percent from ¥30.9 billion a year ago, and grew 7.3 percent on a currency-neutral basis. The overall gain was helped by strong sales of running shoes and the effect of foreign exchange rates. Operating earnings rose 18.9 percent to ¥4.4 billion ($44.6 mm) from ¥3.7 billion but decreased 2.3 percent on a currency-neutral basis. The decline reflected the effect of foreign exchange rates on purchasing costs and an increase in selling, general and administrative expenses due to new openings of directly managed stores, in spite of a reduction of advertising expenses.
In the Oceanic area, sales grew 33.9 percent to ¥7.5 billion ($76 mm) from ¥5.6 billion due to the strong sales of running shoes and the effect of foreign exchange rates. Revenues expanded 14.0 percent on a currency-neutral basis. Operating income reached ¥1.8 billion ($18.2 mm), up from ¥1.4 billion, with an increase of 11.7 percent on a currency-neutral basis.
In the East Asia region, sales jumped 67.8 percent to ¥11.1 billion ($112.5 mm) from ¥6.6 billion, due to the effect of foreign exchange rates and the recording of net sales at the sales price to end consumers at the Korean subsidiary. On a currency-neutral basis, sales jumped 36.7 percent. Operating income rose 32.1 percent to ¥839 million ($8.5 mm) from ¥635 billion, and advanced 8.0 percent on a currency-neutral basis.
In its Other Business segment, which includes Haglöfs, sales moved ahead 26.8 percent to ¥4.04 billion ($40.9 mm) from ¥3.2 billion. The gain reflected the steady sales of outdoor shoes and the effect of foreign exchange rates, in spite of the weak sales of outdoor apparel under the Haglöfs brand. Sales on a currency-neutral basis were up 1.9 percent. The division showed a loss of ¥794 million ($8.1 mm), mainly due to the effect of foreign exchange rates on purchasing costs, against a loss of ¥339 million a year ago.
In its explanation of results, Asics said, “Despite lingering concerns regarding the direction of U.S. government policy and the economic outlook for China and other emerging economies, the global economy continued to advance along a weak recovery track and showed some underlying strength. Backed by the effectiveness of various government measures, the Japanese economy gradually recovered due to a moderate increase in production, and improvements in corporate earnings and employment.
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. It launched GEL-Nimbus 15, GEL-Cumulus 15, and GEL-Kinsei 5, the high-function running shoes, onto the market, and expanded the apparel lineup with an emphasis on running apparel on a global level. It also supported marathon events held in different parts of the world, supplied products to be used by athletes representing their country (in total, seven countries including Japan) at the IAAF World Championships in Athletics held in Moscow, and concluded an advisory agreement with U.S. MLB (Major League Baseball) player Yu Darvish.
On the sales front, the Asics Group strived to expand sales through such measures as establishing a sales subsidiary in Mexico, opening flagship stores of the Asics brand in Osaka, Sydney and Fukuoka, and opening flagship stores of the Onitsuka Tiger brand in Sydney and Kobe.”