Asics Corp. reported revenues climbed 10 percent in the first quarter ended June 30, to 65.4 billion yen ($801.0 mm). Net income jumped 50.1 percent to 5.17 billion yen ($63.4 mm). Operating income advanced 7.8 percent to 8.46 billion yen ($103.7 mm.)
In Japan, revenues grew 4.2 percent to 22.4 billion yen ($318 mm) while operating income grew 13.3 percent to 1.55 billion yen ($19 mm). Japan’s gains were mainly due to the strong sales of running shoes and basketball shoes.
Overall overseas sales increased 12.8 percent to 43.9 billion yen ($538 mm), thanks to the steady sales of running shoes in Europe and the Americas, in addition to the acquisition and consolidation of Haglofs Holding AB and Asics Canada Corporation as a subsidiary in the previous fiscal year.
By region, sales in the Americas rose 12.2 percent to 16.4 billion yen ($201 mm) while operating profit jumped 35.1 percent to 1.88 billion ($24 mm). On a currency-neutral basis, America’s sales grew 24.5 percent while operating earnings advanced 11.5 percent.
In Europe, revenues grew 8.0 percent to 18.4 billion yen ($225 mm). Operating income was down 6.4 percent to 3.8 billion yen ($46.6 mm). In currency-neutral terms, revenues grew 21.0 percent and operating income dipped 6.4 percent.
In the Oceania area, revenues were down 7.8 percent to 2.9 billion yen ($26 mm). Operating earnings slumped 26.5 percent to 817 million yen ($10 mm). Currency-neutral, revenues were down 9.7 percent while operating profits slid 27.9 percent.
In the East Asia region, sales increased 3.5 percent to 3.2 billion yen ($38.9 mm). Operating income vaulted to 345 million yen ($4.2 mm), up from 132 million yen.
Other Business, representing Haglofs, reported revenues of 2.05 billion yen ($35 mm) and showed an operating loss of 87 million yen ($1.1 million yen.) Asics bought the Swedish-outdoor apparel maker in July 2010.
Gross profit in the quarter rose 10.2 percent to 29.8 billion ($366 mm), mainly due to an increase in net sales. Selling, general and administrative expenses increased 11.2 percent to 21.4 billion yen ($261 mm), 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.
Ordinary income increased 23.6 percent to 8.1 billion yen ($99 mm), mainly due to a decrease in exchange loss. The 50.1 percent hike in net income was due to the absence of accrual of a loss on adjustment for adoption of accounting standard for asset retirement obligations, which was recorded in the same period of the previous fiscal year.
In a statement, Asics said that while the global economy in the quarter “recovered as a whole at a moderate pace, negative factors remained unchanged primarily in Europe and North America, including high unemployment rates and a concern about the economic downturn. The Japanese economy remained difficult, due to the effect of limited power supply and nuclear disaster following the occurrence of the Great Eastern Japan Earthquake, resulting in a slow down of recovery in corporate earnings and capital investment. In addition, the effects of deflation, employment insecurity, and other factors remained, and uncertainty about the future continued.”
The statement continued, “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, but domestic consumers saving mentality persisted, and business conditions remained challenging. Under these conditions, the Asics Group took actions to enhance the corporate image and reinforce the Asics brand. This included the continued reinforcement and expansion of its running business on a global scale by supporting marathon events held in different of the world including Paris Marathon and Stockholm Marathon, as well as production of TV commercials for walking shoes BC WALKER jointly with Takarazuka Revue Company. Moreover, in order to make its apparel business more efficient, the Group established Asics
HongKong Apparel Limited in Hong Kong for the development, manufacturing management and quality control of sports apparel and other products.”
The Asics Group also said it launched a new business KIDS Sports Challenge to provide a service of measuring children’s sporting ability, aiming to expand into a business field where the Group can lead to youth development.
Furthermore, the Asics Group started a continuous support program A Bright Tomorrow Through Sport, targeting juveniles who have lost their parents in the Great Eastern Japan Earthquake.
Looking ahead, Asics Corp. forecast revenues would rise 6.5 percent to 124 billion yen in its fiscal first half, operating income would decline 14.3 percent to 10.5 million yen, and net income would inch ahead 1.7 percent to 5.6 million yen.
For the full year ended March 31, 2012, sales are forecast to increase 7.9 percent to 254 billion yen, operating income is expected to improve 4.3 percent to 22.5 million yen and net income is projected to climb 22.2 percent to 13.5 million yen.
