Asics’s sales in its North American region fell 11.9 percent in the fourth quarter as continued robust online growth was offset by wholesale declines. However, Asics predicted a return to double-digit growth in 2021.

Sales reached ¥16,579 million ($158 mm) against ¥18,818 million a year ago. The figures were obtained by subtracting nine-month results from full-year results.

The segment showed an operating loss of ¥1,882 million ($18 mm) for the quarter, down from a loss of ¥2,116 million in the same period a year ago.

For the year, sales in the North American region were down 17.2 percent to ¥65,377 million ($623 mm) from ¥78,959 million a year ago. The decline was attributed to “the impact of the spread of COVID-19.” The year’s segment loss was ¥4,548 million ($43 mm), down from a loss of ¥5,969 million a year ago.

Looking ahead, Asics’ corporate statement said it expects North American sales to bounce back in 2021 to reach ¥78.5 billion, which would represent a gain of 20.1 percent versus 2020.

“We are very pleased with the remarkable progress in 2020, even more, I am especially proud of how resilient the brand and our employees have been given the challenges created by the global pandemic,” said Richard Sullivan, president and COO of Asics America Corporation, in a statement from North America operations. “We have seen a sustained demand for our products across our owned and partner channels even given the circumstances of the last year, and we look forward to continuing that momentum as we go forward.”

Sullivan was promoted to the region’s president and COO in November. Sullivan’s last role with the company was as EVP of North America. A 25-year industry veteran, he started with Asics in 2016 as the president of its Canada business.

At the time, current Asics North America CEO Koichiro Kodama assumed a new global position, managing executive officer, and relocated back to Asics’ headquarters in Kobe, Japan. Kodama had replaced Gene McCarthy as CEO of the region in early 2019, a broad management overhaul.

The highlight in 2020 was digital e-commerce sales in North America, which grew 112 percent for the year. Online growth continued in the fourth quarter, marking the 12th consecutive quarter of growth in the U.S., according to Asics.

Performance Running delivered triple-digit digital growth across e-commerce channels year-to-year in 2020 compared to 2019. The gains in Performance Running were led by Asics’ Legends Models continued popularity and the new Blast Beyond series. Digital growth was also seen in the Core Performance Sports and Sportstyle categories. Asics Core Performance Sports consist of tennis, track and field, wrestling and volleyball. New tennis models resonated with consumers, Asics said.

In the wholesale segment of its U.S. business, bright spots included the sporting goods and boutique fashion channels, which saw year-over-year growth in the fourth quarter.

Asics Global Sales Drop 12 Percent In The Fourth Quarter
Companywide, sales in the quarter were down 12.3 percent to ¥80,578 million. The operating loss widened to ¥7,232 million from ¥2,043 million a year ago. The net loss was ¥12,718 million against earnings of ¥169 million a year ago.

For the year, sales were down 13.0 percent to ¥328,784 million. The operating loss was ¥3.95 million against earnings of ¥10.6 million. The net loss was ¥16.1 million against net earnings of ¥7.1 million.

In its other major regions, sales in Japan were down 18.1 percent to ¥23,411 million for the quarter. The region’s loss was ¥2,152 million against a loss of ¥362 million a year ago. For the year, sales in Japan were down 22.0 percent to ¥94,398 million. The operating loss was ¥3,791 million against earnings of ¥4,895 million a year ago.

In Europe, sales in the quarter fell 21.6 percent to ¥18,913 million. The loss came to ¥875 million against a profit of ¥797 million. Sales in the year were down 8.6 percent to ¥87,342 million. Earnings grew 59.5 percent to ¥4,572 million.

In Greater China, sales in the quarter improved 5.5 percent to ¥10,162 million. Operating earnings reached ¥47 million against earnings of ¥254 million a year ago. For the year, sales were up 4.2 percent to ¥41,118 million, while operating earnings were down 20.3 percent to ¥4,305 million.

Asics noted that it implemented several strategies over the year in response to the pandemic. Digital became a more significant focus as overall e-commerce sales for the company grew 86 percent. With many marathon events canceled, Asics held approximately 1,190 virtual marathon events.

SG&A expenses were reduced by ¥12.3 billion in 2020 to last year and by ¥31.3 billion to plan. Inventories were reduced by ¥5.0 billion to ¥88.1 billion at year-end compared to the same time a year ago. Inventory at year-end includes an increase of ¥4.5 billion in inventory related to the Olympic and Paralympic Games Tokyo 2020. Asics also announced towards the end of the year the closing of its 5th Avenue flagship in New York City in a move it said: “will further improve the North American business’s profitability.”

Sales Expected To Increase Double-Digits In 2021
Asics, in its financial statement, said that “although economic activities resumed and the situation improved under certain restrictions during the third quarter, “the situation has once again become more difficult due to the effects of the re-expansion of COVID-19.” However, Asics said it favorably amended its forecast in November, mainly due to strong sales in Performance Running, especially in Europe.

For 2021, companywide sales are projected in the range of ¥370.0 and ¥385.0 million, representing a gain of 12.5 percent to 17.1 percent. In other major regions, an increase of 17.1 percent to 32.9 percent is forecast in Japan. Sales are forecast to expand 7.1 percent in Europe and 4.6 percent in Greater China.

Photos courtesy Asics