Descente reported an operating profit against a loss for the nine months through December 31 on a 15.1 perfect revenue gain. Revenues reached ¥76,681 million against ¥66,638 million a year ago.
Descente said in its report, “The impact of COVID-19 continues but varies by country/region. In Japan, in particular, net sales recovered steadily from the previous year as the business condition was relatively favorable. The impact of COVID-19 becoming smaller from October and increase in customer traffic. In South Korea, revenues increased compared with the same quarter of the previous fiscal year despite the continued spread of COVID-19 in the third quarter of the fiscal year under review (July through September). In China, revenues increased compared with the same quarter of the previous fiscal year in the third quarter of the fiscal year under review (July through September), despite restrictions in some regions following the expansion of COVID-19 infections.”
Gross profit increased 23.1 percent year-on-year to ¥43,424 million due to increased net sales and continued control of sales losses in Japan. SG&A expenses increased by 3.5 percent from the same quarter of the previous year to ¥39,044 million.
Descente said, “In Japan, we reduced personnel expenses in connection with the voluntary retirement program implemented in the previous fiscal year and the transfer of the business of Ben-General Corporation and reduced advertising and sales promotion expenses by reviewing contracts and sales promotion activities considering the impact of COVID-19 while land rent and commission fees increased due to the opening of new stores and expansion of e-commerce in conjunction with the DTC business expansion strategy. In South Korea, sales commissions linked to sales, land rent, and advertising and sales promotion expenses increased due to more marketing activities than in the previous year as sales recovered.”
Descente’s operating income increased by ¥6,835 million against a loss of ¥2,454 million the previous year as the higher gross profit outweighed higher SG&A expenses.
Net profits rose 2.6 percent to ¥4,952 million from ¥4,828 million a year ago. In the same quarter of the previous fiscal year, Descente recorded a gain on change in equity of ¥7,535 million in extraordinary income due to the reorganization of Descente China Holding Limited (DCH). In contrast, the income for this third quarter was ¥1,819 million due to the sale of its headquarters in Osaka.
For the full year, Descente slightly raised its outlook for sales from ¥103,000 million to ¥105,000 million and also raised its outlook for operating profits, from ¥4,250 million to ¥4,600 million.
Photo courtesy Descente
