EXEC: Asics Corp. Posts 35 Percent Jump In Q1 Sales; Profits Surge 87 Percent

Asics Corporation reported that net sales jumped 44.6 percent year-over-year to ¥152.2 billion ($1.15 bn) in the first quarter ended March 31, and increased 35.0 percent year-over-year excluding foreign exchange effects. Profit attributable to owners of the parent company increased 86.9 percent to ¥16,310 million ($122.8 mm) mainly due to the impact of the increase in net sales and operating profit.

With the continued increase in OneASICS members (increasing by 34.5 percent year-over-year to
around 7.8 million members), first quarter e-commerce sales grew 45.1 percent year-over-year to ¥22.2 billion. Asics said it will continue to work to increase OneASICS members by expanding its touchpoints with runners and to “expand the running ecosystem.”

Gross profit increased 45.3 percent to ¥76,424 million ($575.6 mm) due to the impact of the increase in net sales. Despite deteriorating foreign exchange rates in purchasing goods, the gross margin improved 30 basis points year-over-year to 50.2 percent of sales, which Asics attributed to success with optimizing selling prices.

Operating income increased significantly, up 119.9 percent to ¥22,120 million ($166.6 mm), due to the impact of the increase in net sales. Ordinary income increased 99.3 percent to ¥21,921 million ($165.1 mm), primarily due to the impact of the increase in net sales and operating profit. Operating margin improved to 14.5 percent of sales from 9.5 percent in the year-ago period.

North America region net sales increased 23.9 percent in yen terms, or 9.5 percent in local currency, to ¥26,154 million ($197.0 mm) in the first quarter, due to the strong sales of the Performance Running category and Core Performance Sports category. The N.A. region’s segment loss amounted to ¥346 million ($2.6 mm), primarily due to the increase in SG&A expenses resulting from higher e-commerce sales despite the increase in net sales.

A separate statement from Asics North America, which includes U.S., Mexico and Canada, indicated first quarter successes were driven by the e-commerce and retail channels, with this quarter marking the sixth consecutive quarter of double-digit e-commerce growth.

Among products in North America, sportstyle and core performance sports categories experienced strong quarterly growth. In sportstyle, U.S. wholesale saw double-digit growth, led by the Gel-Lyte III silhouette and the introduction of the EX89 model. In the Core performance sports category, triple-digit growth was driven by the tennis, indoor and track and field subcategories. Specially, the Gel-Resolution, Gel-Dedicate and Gel-Game tennis models experienced year-over-year growth, helping drive the increases within the core performance sports category.

“We have seen a very strong first quarter for the year anchored in successful product launches for both our partner and e-commerce channels,” said Richard Sullivan, president and CEO of Asics North America. “As we look ahead to the rest of the year, our aim is to continue to increase sales, profits and brand affinity across the performance running, sportstyle and core performance sports categories.”

In other regions, Japan’s net sales increased 35.0 percent to ¥36,356 million ($273.8 mm) due to strong sales in all categories. Segment income increased significantly, growing 226.3 percent to ¥4,721 million ($35.6 mm) due to an improvement in the gross profit margin, as well as the impact of the increase in net sales.

Europe region net sales increased 43.9 percent in yen terms, or 32.1 percent in local currencies, to ¥44,445 million ($334.8 mm) in Q1, due to strong sales in all categories. Segment income increased 61.7 percent, or 48.2 percent in local currencies, to ¥6,551 million ($49.3 mm) in the period, primarily due to the impact of the increase in net sales.

Greater China region net sales increased 41.2 percent in yen terms, or 33.7 percent in local currencies, to ¥19,168 million ($144.4 mm) due to strong sales in all categories. Segment income increased 24.5 percent, or 18.0 percent in local currencies, to ¥4,508 million ($34.0 mm), primarily due to the impact of the increase in net sales.

Oceania region net sales increased 56.7 percent in yen terms, or 46.7 percent in local currencies, to ¥11,542 million ($86.9 mm) in the first quarter due to strong sales in all categories. Segment income increased 43.8 percent, or 34.8 percent in local currencies, to ¥2,081 million ($15.7 mm), primarily due to the impact of the increase in net sales.

Southeast and South Asia regions net sales increased 91.1 percent in yen terms, or 75.4 percent in local currencies, to ¥6,958 million ($52.4 mm) in Q1 due to strong sales in all categories. Segment income increased 176.1 percent, or 152.3 percent in local currencies, to ¥1,738 million ($13.1 mm) in the period, primarily due to the impact of the increase in net sales.

Other regions net sales increased 41.3 percent in yen terms, or 30.0 percent in local currencies, to ¥13,038 million ($98.2 mm) in Q1 due to the strong sales in the Performance Running category and Sports Style category. Segment income increased significantly 160.3 percent, or 136.2 percent in local currencies, to ¥1,861 million ($14.0 mm), primarily due to the impact of the increase in net sales.

From a category perspective, Performance Running net sales increased 32.6 percent in yen terms to ¥77,913 million ($586.8 mm) due to strong sales in all regions. Category profit increased 27.3 percent to ¥16,913 million ($127.4 mm), primarily due to the impact of the increase in net sales.

Core Performance Sports net sales increased significantly, jumping 122.4 percent in yen terms to ¥22,741 million ($171.3 mm) due due to the double-digit growth in all regions. Category profit increased 275.1 percent to ¥5,779 million ($43.5 mm), primarily due to the impact of the increase in net sales.

Sports Style net sales increased 90.8 percent in yen terms to ¥15,487 million ($116.6 mm) due to strong sales in all regions. Sports Style net sales in Europe region grew 124.2 percent, net sales in Oceania region grew 87.2 percent and net sales in Greater China region grew 74.3 percent year on year. Category profit increased significantly 179.6 percent to ¥3,760 million ($28.3 mm), primarily due to the impact of the increase in net sales.

Apparel and Equipment net sales increased 10.0 percent in yen terms to ¥9,605 million ($72.3 mm) mainly due to the strong sales in Japan region and Southeast and South Asia regions. Category profit increased 243.1 percent to ¥601 million ($4.5 mm) due to an improvement in the gross margins, as well as due to the impact of the increase in net sales.

Onitsuka Tiger net sales increased 38.8 percent to ¥12,124 million ($91.3 mm) due to increased revenue in Japan region, which is experiencing a trend of recovery in inbound net sales, the Southeast and South Asia regions, which are experiencing tremendous growth. Category profit increased 63.3 percent to ¥3,026 million ($22.8 mm) mainly due to the impact of the increase in net sales.

Photo courtesy Asics