Asics reported net profit decreased 1.4 percent in the first half despite a profit turnaround in the Americas region. Sales fell 3.3 percent due to declines in Japan, Europe and the Americas.
In the six months ended June 30, consolidated net sales decreased 3.3 percent (a decrease of 2.4 percent using the previous fiscal year’s foreign exchange rate) to ¥203.74 billion.
Domestic net sales decreased 3.4 percent to ¥54.3 billion mainly due to weak sales of sportswear, despite strong sales of running shoes. Overseas sales decreased 3.3 percent (a decrease of 2.1 percent using the previous fiscal year’s foreign exchange rate) to ¥149.5 billion due to weak sales in the European and American regions as well as the effect of the strong yen, despite strong sales of running shoes and Onitsuka Tiger shoes in the Oceania/Southeast and South Asian regions as well as the East Asian region.
Gross profit increased 0.7 percent to ¥94.5 billion mainly due to an improved cost of sales ratio. Selling, general and administrative expenses increased 5.3 percent to ¥78.5 billion due to increased costs in line with the expansion of own retail stores and increased costs related to the rollout of various digital strategies.
Operating profits declined 17.1 percent to ¥16.08 billion from ¥19.4 billion. Ordinary income increased 5.0 percent to ¥18.07 billion due to foreign exchange gains recorded in the second quarter ended June 30, 2017 compared to foreign exchange losses posted in the corresponding period of the previous fiscal year
Profit attributable to owners of parent reached ¥11.69 billion against ¥11.85 billion a year ago. Asics noted that comprehensive income amounted to ¥1.34 billion against a loss of ¥5.3 billion in the same period a year ago.
In the Japanese region, sales decreased 2.9 percent to ¥63.87 billion, due to weak sales of sportswear, despite strong sales of running shoes. Segment income decreased 14.1 percent to ¥4.46 billion, due to the effect of declined sales, despite an improved cost of sales ratio.
In the American region, sales decreased 6.1 percent (a decrease of 5.9 percent using the previous fiscal year’s foreign exchange rate) to ¥55.66 billion, due to weak sales in the U.S. Segment income increased 394.9 percent (an increase of 396.2 percent using the previous fiscal year’s foreign exchange rate) to ¥3.55 billion mainly due to an improved cost of sales ratio, expenses being pushed to the second half of the fiscal year and the recording of allowance for doubtful receivables in the corresponding period of the previous fiscal year.
In the European region, sales decreased 10 percent (a decrease of 7.7 percent using the previous fiscal year’s foreign exchange rate) to ¥50.18 billion, due to the effect of changes in the retail market and intensifying competition, in addition to the effect of foreign exchange rates. Segment income decreased 40.0 percent (a decrease of 38.4 percent using the previous fiscal year’s foreign exchange rate) to ¥3.6 billion mainly due to the effect of declined sales.
In the Oceania/Southeast and South Asian regions, sales increased 15.5 percent (an increase of 13.7 percent using the previous fiscal year’s foreign exchange rate) to ¥14.45 billion, due to the strong sales of running shoes and Onitsuka Tiger shoes. Segment income increased 6.7 percent (an increase of 4.9 percent using the previous fiscal year’s foreign exchange rate) to ¥2.38 billion.
In the East Asian region, sales increased 10.8 percent (an increase of 12.4 percent using the previous fiscal year’s foreign exchange rate) to ¥25.1 billion, due to the continuing strong sales of running shoes and Onitsuka Tiger shoes, particularly at the subsidiary in China. Segment income increased 5.1 percent (an increase of 8.9 percent using the previous fiscal year’s foreign exchange rate) to ¥4.22 billion.
In its Other business segment, sales decreased 8.2 percent (a decrease of 2.3 percent using the previous fiscal year’s foreign exchange rate) to ¥3.81 billion, due to weak sales of outdoor shoes under the HAGLÖFS brand and the effect of foreign exchange rates. Segment loss was ¥430 million.
Looking ahead, Asics retained its guidance for the year. The company continues to expect sales for the full year of ¥420 billion, up 5.2 percent versus the year ago. Operating income is expected to ¥22 billion, a reduction of 13.6 versus a year ago. Ordinary income ¥21 billion, off 10.3 percent year over year. Profit attributable to owners of parent is expected to reach ¥13 billion, down 16.5 percent year over year.
Photo courtesy Asics
