Asics Corp reported sales in its North American region grew 22 percent in 2022 with a big foreign-exchange boost. Currency-neutral sales rose 3.1 percent on top of a 27.2 percent jump in 2021. The region was profitable for the second straight year although profits were down due to e-commerce expenses.

Sales reached ¥105.33 billion ($801 mm) in the year ended December 31, up from ¥86.18 billion in 2021. The 3.1 percent currency-neutral gain was helped by strong sales of the Performance Running category and Core Performance Sports category. Segment income decreased 96.9 percent to ¥26 million ($200,000) from ¥848 million a year ago, mainly due to an “increase in SG&A expenses resulting from higher e-commerce sales,” according to Asic’s corporate statement.

The 3.1 percent currency-neutral gain builds on a 27.2 percent currency-neutral gain in 2021 in a recovery year amid the pandemic. In 2020, sales on a currency-neutral basis were down 14.9 percent. The strong sales in 2022 helped Asics’ North America region show its first annual profit in 2022 since 2017.

For the fourth quarter, sales in the North American region jumped 49.1 percent to ¥29.68 billion ($222 mm) from ¥19.91 billion in the prior-year period. The loss in the quarter was reduced to ¥1.40 billion from ¥1.900 billion a year ago.

The region, which includes the U.S., Canada and Mexico, reported double-digit growth in both its e-commerce and wholesale drove sales gains in the fourth quarter.

In a statement released Wednesday, Asics North America noted that the region’s e-commerce channel reported its fifth consecutive quarter of double-digit growth. In the U.S., the retail channel saw quarterly double-digit growth driven by Asics’ owned stores, showing a second consecutive quarter of growth.

Fourth-quarter results were attained by subtracting nine-month results from full-year results. Currency-neutral comparisons weren’t available for the quarter.

“While 2022 continued to present an array of challenges across the industry, the team continued to push forward and drive strong results,” said Richard Sullivan, president and CEO of Asics North America. “As 2023 gets underway, we are celebrating milestone anniversaries for several of our most sought-after products in our performance running category and we look forward to showcasing our nearly 75-year history, while continuing to push the boundaries of innovation.”

In the U.S., the Performance Running, Sportstyle and Core Performance Sports sectors all experienced quarterly growth. In performance running, GT-2000 delivered strong sales results. Within Sportstyle, the Gel-Lyte III shoe led the category’s quarterly increases. In Core Performance Sports category, year-over-year quarterly growth was attributed to tennis and wrestling footwear, specifically the Gel-Resolution, Gel-Dedicate and Matflex silhouettes.

Companywide Sales Expand 20 Percent In 2022
Companywide, sales for the full year grew 19.9 percent to ¥484.6 billion ($34.7 bn), a record high, with double-digit growth in all regions. On a currency-neutral basis, sales advanced 9.6 percent.

Asics in its statement said the top-line growth benefited from efforts “to normalize socioeconomic activities” in many regions.

Gross margins in the year reached 49.7 percent, slightly up from 49.5 percent a year ago. Improving sales channel mix and higher selling prices offset the impact of deteriorating foreign exchange rates in purchasing goods as well as higher logistics costs in North America and Europe.

Operating income increased significantly, up 54.9 percent to ¥34.0 billion ($259 mm), a record high. Asics said it achieved its operating income target of ¥25.0 billion set in the Mid-term Plan 2023 ahead of schedule. Ordinary income rose 39.5 percent to ¥30,913 million ($235 mm) while net income doubled, rising 111.5 percent to ¥19,887 million ($151 mm).

For the fourth quarter, companywide sales increased 48.4 percent to ¥121,533 million ($924 mm) from ¥81,875 million. Asics reduced its operating loss in the three months to ¥2,039 million from ¥13,840 ($16 mm).

Regional Performance
In other regions, sales in its home market of Japan increased 12.3 percent in the year to ¥123,402 million due to strong sales of the Core Performance Sports category and Onitsuka Tiger category. Segment income jumped 406.6 percent to ¥6,046 million mainly due to the sales increase.

Europe region’s sales for the year jumped 22.0 percent (15.0 percent on currency-neutral basis), to ¥130,099 million due to strong sales of the Performance Running category and Sports Style category. Segment income increased 3.4 percent to ¥11,254 million due to the impact of higher sales and foreign exchange effects.

In Greater China, sales in the year increased 18.7 percent (4.2 percent on a currency-neutral basis) to ¥62,411 million due to the strong sales of the Performance Running category and Sports Style category. Segment income gained 10.1 percent to ¥10,067 million, mainly due to the higher sales and foreign exchange effects.

In the Oceania region, sales in the year increased 34.5 percent (22.4 on a currency-neutral basis) to ¥33,292 million due to the strong sales in all categories. Segment income was up 55.7 percent to ¥5,211 million due to improved gross margins and sales improvement.

Southeast and South Asia sales vaulted 69.2 percent (49.9 percent on a currency-neutral basis) to ¥18,448 million due to the strong sales in all categories. Segment income surged 209.5 percent to ¥2,984 million due to an improving gross margin, as well as higher sales.

In the Other Regions segment, sales increased 24.2 percent (11.4 percent on currency-neutral basis) to ¥43,630 million due to strong sales of the Performance Running category and Sports Style category. Segment income soared 102.9 percent to ¥3,646 million mainly due to the sales gain.

Category Performance
Among categories in the year:

  • Performance Running sales increased 24.0 percent to ¥258,272 million due to the strong sales in all regions other than Japan. Category profit increased 15.4 percent to ¥49,181 million.
  • Core Performance Sports sales advanced 31.0 percent to ¥54,155 million due to strong sales in all regions. Category profit jumped 88.7 percent to ¥9,489 million.
  • Sports Style sales increased 30.7 percent to ¥43,466 million. Category profit climbed 49.1 percent to ¥6,425 million.
  • Apparel and Equipment sales gained 3.4 percent to ¥35,278 million due to the foreign exchange effects. Category loss amounted to ¥1,645 million mainly due to increased SG&A expenses.
  • Onitsuka Tiger’s sales grew 11.6 percent to ¥43,011 million due to the strong sales in Japan and Southeast and South Asia regions, despite the decrease in sales in the Greater China region impact of Covid-19 related restrictions in Shanghai and other areas. Category profit increased 49.1 percent to ¥7,399 million due to the sales increase and improved gross margins.

Outlook
Looking ahead, Asics’ outlook for the current year calls for:

  • Sales to increase 5.2 percent to ¥510,000 million.
  • Operating income to gain 8.8 percent to ¥37,000 million;
  • Ordinary income to increase 3.5 percent to ¥32,000 million; and
  • Net income to inch up 0.6 percent to ¥20,000 million.

Photo courtesy Asics/Flora Duffy