Asics Corp. Posts Q4 Sales Decline in the Americas

Asics Corp. reported that total consolidated net sales increased 5.3 percent to ¥247.8 billion ($3.11 bn) for the fiscal year ended March 31.  For the fourth quarter, Asics Corp. saw total consolidated net sales increase 3.5 percent to ¥61.5 billion ($777 mm) for the period ended March.

Domestic net sales rose 5.0 percent to ¥92.5 billion ($1.21 bn), mainly due to the strong sales of running shoes and athletic shoes such as basketball shoes. Overseas sales increased 5.4 percent to ¥155.3 billion ($1.95 bn), thanks to the steady sales of running shoes in Europe and the Americas, in addition to the acquisition and consolidation of HAGLÖFS HOLDING AB and ASICS Canada Corporation as subsidiaries in the previous fiscal year.

Gross profit rose 4.3 percent to ¥107.5 billion ($1.35 bn), mainly due to an increase in net sales. Selling, general and administrative expenses increased 7.8 percent to ¥87.9 billion ($1.10 bn). This was mainly the result of recording amortization expenses for goodwill and intangible fixed assets arising from business combination in the previous fiscal year, in addition to an increase in advertising expenses. As a result, operating income decreased 9.0 percent to ¥19.6 billion ($247 mm). Ordinary income increased 1.2 percent to ¥19.7 billion ($247 mm), mainly due to a decrease in exchange loss.

Net income for fiscal 2012 rose 14.2 percent to ¥12.6 billion ($158 mm) due to the recording of gain on sales of tangible assets arising from the sale of the land and building of former Tokyo Branch.

Japan area sales increased 4.2 percent to ¥109.2 billion ($1.37 bn) and segment income increased 11.2 percent to ¥5.6 billion ($71 mm). This was mainly due to the strong sales of running shoes and athletic shoes such as basketball shoes.  

America area sales decreased 1.0 percent to ¥59.0 billion ($741 mm) due to the effect of foreign exchange rates notwithstanding the strong sales of running shoes in Brazil, in addition to the acquisition and consolidation of ASICS Canada Corporation as a subsidiary in the previous fiscal year. Segment income decreased 20.7 percent to ¥3.71 billion ($47 mm) mainly due to a rise in purchasing costs, an increase in advertising expenses, and an increase in depreciation expenses arising from the start of operations of the new distribution center.

For the fourth quarter, sales in the Americas fell 10.2 percent in yen terms to ¥12.2 billion ($154 mm), but also fell 6.7 percent in currency-neutral terms.

Europe area sales increased 9.9 percent to ¥61.0 billion ($766 mm) thanks to the strong sales of running shoes. However, segment income decreased 18.6 percent to ¥7,028 million ($88 mm) mainly due to a rise in purchasing costs and an increase in advertising expenses.

Oceania area sales decreased 2.0 percent to ¥10.3 billion ($129 mm) due to the weak sales of running shoes. Segment income also decreased 9.6 percent to ¥2.5 billion ($31 mm) mainly due to an increase in advertising expenses.

East Asia area sales increased 4.6 percent to ¥13.3 billion ($166 mm) and segment income increased 41.2 percent to ¥1.04 billion ($13 mm) thanks to the steady sales of Onitsuka Tiger shoes and running shoes.

Other business sales increased 77 percent to ¥7.71 billion ($97 mm) due to the acquisition of HAGLÖFS HOLDING AB as a consolidated subsidiary in the previous fiscal year. Segment loss was ¥204 million (-$3 mm) mainly as a result of recording amortization expenses for goodwill and intangible fixed assets arising from the business combination.

Forecast for the Fiscal Year Ending March 31, 2013
In the sporting goods industry, interests in sport remained at a high level owing to rising health consciousness on the back of a running boom and other factors. Nevertheless, business conditions are expected to remain extremely severe. Under these conditions, the ASICS Group will quickly respond to an increasingly globalizing business environment and pursue continuous growth based on the Five-Year Strategic Plan, “ASICS Growth Plan (AGP) 2015.” Presently, the ASICS Group forecasts consolidated net sales of ¥259 billion, operating income of ¥20 billion, ordinary income of ¥20 billion and net income of ¥12 billion in the fiscal year ending March 31, 2013.