Asics showed a loss of ¥1.74 billion ($16.1 mm) in the North America region in the third quarter against a loss of ¥534 million a year ago. Sales in the quarter dipped 0.1 percent to ¥21.17 billion ($196 mm) from ¥21.19 billion.

The figures were attained by extrapolating second-quarter results from nine-month results.

In the nine months, Asics sales in the North America region increased 1.6 percent (an increase of 2.5 percent if applying the previous fiscal year’s foreign exchange rate) to ¥60,141 million. The gains were due to strong sales of the Performance Running category and the Core Performance Sports category.

The segment loss in the nine months amounted to ¥3,853 million mainly due to a deteriorated cost of sales ratio. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment loss was ¥2,632 million.

Companywide, sales in the third quarter were down 3.8 percent to ¥98.96 billion from 102.9 billion. Operating profits were down 40.5 percent to 4.09 billion from ¥6.87 billion.

In the nine months ended September 30, 2019, consolidated net sales decreased 3.2 percent (an increase of 0.6 percent if applying the previous fiscal year’s foreign exchange rate) to ¥286,166 million. This was due to weak sales of the Apparel and Equipment category, in addition to the effect of foreign exchange rates on account of the strong yen despite strong sales of the Onitsuka Tiger category.

Gross profit decreased 4.4 percent to ¥134,377 million due to a slightly higher cost of sales ratio. Selling, general and administrative expenses decreased 2.8 percent to ¥121,699 million reflecting the impact of structural reform conducted at the end of the previous fiscal year. However, operating income decreased 17.5 percent to ¥12,677 million. As a result, ordinary income decreased 3.8 percent to ¥13,116 million despite recording of foreign exchange gains. Profit attributable to owners of parent decreased 16.4 percent to ¥6,928 million.

Business results by category were as follows.

1) Performance Running

Net sales decreased 5.2 percent (a decrease of 0.7 percent if applying the previous fiscal year’s foreign exchange rate) to ¥126,728 million mainly due to weak sales in Europe as well as the effect of foreign exchange rates, despite strong sales in Japan and North America. Operating income decreased 53.4 percent (a decrease of 49.9 percent if applying the previous fiscal year’s foreign exchange rate) to ¥4,480 million. In business results by category measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, operating income decreased 36.3 percent to ¥6,126 million.

2) Sports Style

Net sales decreased 5.0 percent (a decrease of 0.2 percent if applying the previous fiscal year’s foreign exchange rate) to ¥25,499 million mainly due to weak sales in Greater China, despite strong sales in Japan and North America. Operating income decreased 87.9 percent (a decrease of 73.7 percent if applying the previous fiscal year’s foreign exchange rate) to ¥64 million. In business results by category measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, operating income decreased 28.8 percent to ¥381 million.

3) Core Performance Sports

Net sales decreased 0.5 percent (an increase of 2.5 percent if applying the previous fiscal year’s foreign exchange rate) to ¥33,059 million mainly due to weak sales in Europe, despite strong sales in North America, Greater China, and the Southeast and South Asia. Operating loss amounted to ¥394 million. In business results by category measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, operating loss was ¥182 million.

4) Apparel and Equipment

Net sales decreased 12.5 percent (a decrease of 9.6 percent if applying the previous fiscal year’s foreign exchange rate) to ¥29,753 million. An operating loss persisted.

5) Onitsuka Tiger

Net sales increased 7.8 percent (an increase of 11.8 percent if applying the previous fiscal year’s foreign exchange rate) to ¥35,008 million due to strong sales in Japan, Korea, and the Southeast and South Asia. Operating income increased 16.1 percent (an increase of 20.2 percent if applying the previous fiscal year’s foreign exchange rate) to ¥7,599 million. In business results by category measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, operating income increased 21.4 percent to ¥7,951 million.

Business results by reportable segments were as follows.

1) Japanese region

Net sales increased 2.7 percent to ¥92,364 million due to strong sales of the Performance Running category and the Onitsuka Tiger category. Segment income increased 24.2 percent to ¥5,257 million due to an improved cost of sales ratio.

In business results by region measured by the same basis as the previous fiscal year,  segment income increased 37.5 percent to ¥5,822 million.

2) North American region

Net sales increased 1.6 percent (an increase of 2.5 percent if applying the previous fiscal year’s foreign exchange rate) to ¥60,141 million due to strong sales of the Performance Running category and the Core Performance Sports category. Segment loss amounted to ¥3,853 million mainly due to a deteriorated cost of sales ratio. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment loss was ¥2,632 million.

3) European region

Net sales decreased 12.4 percent (a decrease of 6.5 percent if applying the previous fiscal year’s foreign exchange rate) to ¥71,495 million mainly due to weak sales of the Performance Running category and the effect of foreign exchange rates. Segment income decreased 57.2 percent (a decrease of 55.2 percent if applying the previous fiscal year’s foreign exchange rate) to ¥2,069 million. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment income decreased 40.0 percent to ¥2,897 million.

4) Greater China region

Net sales decreased 4.8 percent (an increase of 0.1 percent if applying the previous fiscal year’s foreign exchange rate) to ¥29,814 million due mainly to the effect of foreign exchange rates, despite strong sales of the Onitsuka Tiger category on a local currency basis. Segment income decreased 8.5 percent (a decrease of 3.6 percent if applying the previous fiscal year’s foreign exchange rate) to ¥5,144 million mainly due to increased selling, general and administrative expenses resulting from the establishment of extended headquarter function in Shanghai. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment income decreased 3.3 percent to ¥5,435 million.

5) Oceanian region

Net sales increased 1.3 percent (an increase of 10.5 percent if applying the previous fiscal year’s foreign exchange rate) to ¥12,645 million mainly due to the effect of the foreign exchange rate, despite strong sales of the Performance Running category. Segment income decreased 18.6 percent (a decrease of 11.3 percent if applying the previous fiscal year’s foreign exchange rate) to ¥1,408 million mainly due to a deteriorated cost of sales ratio. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment income increased 5.7 percent to ¥1,830 million.

6) Southeast and South Asian region

Net sales increased 16.8 percent (an increase of 19.5 percent if applying the previous fiscal year’s foreign exchange rate) to ¥8,901 million mainly due to strong sales of the Performance Running category and the Onitsuka Tiger category. Segment income decreased 28.2 percent (a decrease of 26.7 percent if applying the previous fiscal year’s foreign exchange rate) to ¥873 million mainly due to vigorous marketing investment. Net sales in India maintained high growth of approximately 30 percent compared to the same period in the previous fiscal year, on a local currency basis. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment income decreased 26.6 percent to ¥892 million.

7) Other regions

Net sales decreased 3.3 percent (an increase of 7.0 percent if applying the previous fiscal year’s foreign exchange rate) to ¥27,917 million mainly due to the effect of the foreign exchange rate, despite strong sales of the Onitsuka Tiger category. Segment income amounted to ¥1,507 million, reflecting the effect of structural reform conducted at the end of the previous fiscal year. In business results by region measured by the same basis as the previous fiscal year and applying the previous fiscal year’s foreign exchange rate, segment income was ¥1,717 million.

Outlook 

Asics retained its outlook for the year. Sales are expected to be ¥390 billion, up 0.9 percent. Operating income is expected to be ¥12 billion, up 14.1 percent. Ordinary income is expected to reach ¥12,5 billion, up 42.6 percent. Net income is expected to be ¥7.5 billion, flat with year-ago earnings.

Photo courtesy Asics