Descente Ltd. reported a sharp decline in profits in the first quarter ended June 30 as sales dipped 4.2 percent.
Revenues reached ¥29.5 billion, down from ¥30.8 billion. Operating income reached ¥451 million against ¥1.12 billion, a decline of 59.6 percent. Net income dropped 63.6 percent to ¥354 million from ¥975 million.
Among major regions, Japan’s sales were down 7.3 percent to ¥10.8 billion. The region showed an operating loss of ¥1.5 billion against a loss of ¥792 million a year ago.
Descente said of the region, “In the athletic category, although “DESCENTE” remained steady, “le coq sportif” and “umbro” struggled. In the golf category, “DESCENTE” performed well but “Munsingwear” struggled. As a whole of Japan, operating loss increased from the previous year due to a decrease in gross profit resulting from lower sales.”
In Asia, sales declined 2.8 percent to ¥18.1 billion. Operating profit moved up 2.8 percent to ¥2.19 billion. Descente said, “In Korea, “umbro” performed well and “DESCENTE” struggled. In Hong Kong and Singapore, “le coq sportif” performed well. As a whole of Asia, sales fell below the previous year though profits were higher than the previous year due to the improvement of selling price ratio in Korea.”
In the combined Europe/Americas region, sales were up 17.3 percent to ¥558 million; the operating loss was ¥227 million against a loss of ¥219 million a year ago. Descente said, “Sales in Europe/Americas as a whole rose from the previous year due to strong sales in “inov-8″. However, operating loss increased slightly from the previous year resulting from an increase of SGA of DESCENTE ATHLETIC AMERICAS, INC., which established in March 2018, exceeded the increase in gross profit.”
For the full year ended March 2020, sales are expected to reach ¥144 billion, up 1.1 percent. Operating income is expected to be ¥8 billion, up 0.8 percent. Net profit is expected to reach ¥5.3 billion, up 34.4 percent.