Globeride, the parent of the Daiwa fishing brand, reported flattish global sales and earnings in the fiscal year ended March 31, with increasing profits in its home market of Japan and Europe offsetting a loss in the Americas due in part to tariffs as well as profit declines in the Asia and Oceania region.

Global sales for Globeride, which also makes golf, tennis and cycling products, for the year were ¥126,956 million ($804 mm), up 2.4 percent year on year. Operating profit dipped 0.1 percent to ¥6,501 million as an increase in revenue and cost improvement led to an increase in gross profit and an increase in SG&A expenses.

Ordinary profit was up 10.7 percent year on year to ¥7,184 million due mainly to an increase in gain on valuation of receivables in foreign currencies, and profit attributable to owners of parent grew 13.1 percent to ¥5,409 million.

Results were said to be in line with a pre-announcement provided on April 30. At the time, Globeride said results would come in above its guidance due to recovery in several markets and improving inventory levels in the marketplace. Its prior guidance called for sales of ¥125,000 million, operating profit of ¥5,400 million, ordinary profit of ¥5,500 million, and net profit of ¥4,300 million.

Globeride said in its latest financial statements that during the year, “the Japanese economy showed signs of a gradual recovery path, as the employment and income environment improved, and demand from inbound tourists picked up. On the other hand, the future remains unpredictable due to high material and energy prices as well as stagnant consumer confidence caused by rising commodity prices fueled by the depreciation of the yen. Overseas, there is heightened uncertainty about the outlook due mainly to geopolitical risks related to the situations in Ukraine and the Middle East, the slowdown of the Chinese economy, and trade policy and other factors in the U.S., despite a gradual recovery mainly in the U.S. and Europe.

“Under these situations, the market of the outdoor, sports, and leisure industry, in which the Group (the company and its subsidiaries) operates, are gradually recovering, despite the increased burden on households from high energy prices and soaring commodity prices, and the market inventories are also beginning to stabilize.

“In such conditions, as “A Lifetime Sports Company,” the Group has been providing attractive products and high-quality services for everyone who loves nature and sports.”

Regional Performance

  • Japan: Sales in Japan rose 6.3 percent year on year to ¥86,959 million while segment profit advanced 24.8 percent to ¥5,629 million. Globeride said: “In Japan, the outdoor, sports, and leisure markets still remain sluggish partially due to the situation affecting household disposable income from rising energy and commodity prices. Under such circumstances, the Group launched new products and provided services to satisfy our customers, for example, spinning reels “Saltiga” and “Certate” and a bass rod “Steez” in fishing, and “Onoff Lady” and “Onoff Kuro” in golf.”
  • Americas: Sales increased 9 percent to ¥13,725 million. The segment recorded a loss of ¥169 million (compared with a profit of ¥39 million in the previous fiscal year) due to higher tariff costs and increased SG&A expenses. Globeride said, “In the Americas, market conditions are gradually recovering, although the outlook remains uncertain due to factors such as the impact of tariff policies. Under such circumstances, the Group made efforts for expanding sales mainly in bass fishing goods, including the “Tatula series,” and sea fishing goods for the U.S. market.”
  • Europe: Sales totaled ¥17,045 million, up 4.6 percent year on year. The region’s profit rose 2.7 percent to ¥683 million. Globeride said, “In Europe, while the situation varies among countries, the market showed signs of gradual recovery. Under such circumstances, as the Group launched products that catered to local needs and took other measures.”
  • Asia and Oceania: Net sales were ¥52,161 million, (up 3.7 percent year on year), and segment profit was ¥4,846 million, down 5.6 percent year on year. Globeride said, “In the Asia and Oceania region, while the socioeconomic situation varies among countries, market conditions in the Greater China region, with China at the center, show slow progress. However, the market conditions in Southeast Asia were on a recovery trend. Under such circumstances, the Group has worked to expand sales mainly in high-class Japanese-made products and goods exclusively for a local area.”

Outlook
Globeride’s outlook calls for sales of ¥134,000 million, up 5.5 percent year on year; operating profit of ¥7,000 million, up 7.7 percent; ordinary profit of ¥6,400 million, down 10.9 percent; and net profit of 5,500 million, up 1.7 percent.

Globeride said, “Looking ahead, although domestic and overseas economies are expected to grow, the global economic situation remains unpredictable due to factors such as high material and energy prices, heightening geopolitical risks, development of the U.S. trade policy, and the stagnant Chinese economy. The market environment of the outdoor, sports, and leisure industry, in which the Group operates, is currently on a steady recovering trend despite heightened consumer caution driven by higher prices and interest rates. Under these situations, as for the financial results forecast for the next fiscal year, the Group expects to record consolidated net sales of 134,000 million (up 5.5 percent year on year), consolidated operating profit of 7,000 million (up 7.7 percent year on year), consolidated ordinary profit of 6,400 million (down 10.9 percent year on year) and profit attributable to owners of parent of 5,500 million (up 1.7 percent year on year). While the impact of the Middle East situation remains uncertain at this time, this forecast does not take such impact into account. If we anticipate significant impact due to the Middle East situation that requires disclosure, we will promptly make an announcement. The Group will continue to proactively reform its revenue structure and work collectively to build a business foundation that ensures sustainable growth and to transform its management structure to make it more resilient and efficient.”

Globeride’s portfolio includes fishing (Daiwa), golf (Fourteen, Roddio, G-III, ONOFF), tennis (Prince, Diadem) and cycle  (Focus Bikes, Corratec) in its portfolio.

Image courtesy Daiwa