Descente reported sales in the nine months ended December 31 slipped 8.0 percent to ¥92.9 billion ($845 mm).
Operating income reached ¥1.68 billion ($15.3 mm), down 64.0 percent. Ordinary income fell 58.5 percent to ¥2.1 billion ($19.1 mm) and net income was down 37.5 percent to ¥1.77 billion ($16.1 mm).
In Japan, sales eased 1.9 percent to ¥46.39 billion ($422 mm) from ¥47.31 billion. Operating income was shaved to ¥369 million ($3.4 mm) from ¥938 million.
Descente said sales of winter goods in Japan slowed mainly due to the effects of consumption tax increases and warm winter, and overall sales and profits in Japan business fell short of the result in the previous year. In the athletic category, “Descente” performed well due to the direct managed stores’ good sales but “Umbro” struggled. In the golf category, “Descente” performed well, but other brands struggled due to factors such as a decline in sales at department stores.
In Asia, sales fell xx percent to ¥47.66 billion ($433.7 mm) from ¥54.55 billion. Operating income fell to ¥1.8 billion ($16.4 bn) from ¥4.17 billion;
Descente said that in China sales of “Descente” which is operated by an affiliate, accounted for by the equity method, has been expanding. In South Korea, existing store sales of “Descente” and other brands declined significantly due to a slump in sales that began in July 2019. In Hong Kong, all the brands have been struggling since July due to the impact of protest demonstration. In Singapore, “Le Coq Sportif” and “Munsingwear” performed well due to an increase in existing store sales. As a result, overall sales and profits in the Asia business fell short of the result in the previous year.
In the Europe/Americas region, sales were down slightly to ¥2.758 billion ($25.1 mm) from ¥2.761 billion. The operating loss grew slightly to ¥513 million ($5.7 mm) from ¥444 million.
Descente said sales in the Europe/Americas region decreased year by year due to the suspension of Descente North America, Inc.’s business. Loss decreased slightly due to the completion of the amortization of goodwill and intangible assets for “Inoveight group” in the previous fiscal year.
For the full year, Descente now expects sales of ¥130.8 billion, down 8.0 percent. Operating income is expected to reach ¥1.1 billion, down 86.1 percent. Net income is expected to show a loss of ¥1 billion. The sales and operating profit forecast are unchanged. Previously net income was expected to be ¥700 million.
Photo courtesy Descente