Yonex Co., Ltd. reported fiscal 2024 first-half net sales grew 15.2 percent ¥57.7 billion as demand for sports was said to have remained strong in all regions of the world. The net sales figure beat the company’s H1 forecast of ¥57.0 billion. The company said the resumption of international competitions, sales promotion activities, and the success of contracted athletes stimulated the market. Consolidated net sales reportedly reached a record high in the cumulative H1 period, due partly to the positive effect of yen depreciation on overseas sales. The company said China continued to grow revenues mainly in badminton, although the growth rate has slowed compared to the previous year’s first half.

Consolidated operating profit fell 21.1 percent in the first half to ¥5.6 billion despite gross profit increasing 11 percent due to higher sales, as an increase in SG&A expenses offset the gross profit gain. Advertising increased in foreign currency terms due to international tournament sponsorships and tournament-related promotions. Yen depreciation also contributed to the increase in expenses.

Consolidated net profit for the six-month period declined 21.4 percent to ¥4.3 billion.

Inventories decreased 12.1 percent to ¥18.8 billion at half-end, mainly due to declines in China, where inventories reportedly increased at the end of the last fiscal year due to the impact of COVID and decreased as sales recovered from February onward.

Japan Segment
Net sales posted a 7.4 percent growth in H1 to ¥26.1 billion.

In Japan, Badminton sales remained steady due to strong sales of new model racquets launched in Q1 and increased demand in the tournament season. Tennis sales reportedly decreased due to “the abating of the strong growth seen in the last few years.” Consequently, overall sales remained flat.

Overseas distributor sales “increased significantly” on the back of particularly strong sales in Asia, where the badminton market continues to be active and contributed to the overall sales increase in the Japan segment.

Operating profit for the segment fell 62.4 percent to ¥1.0 billion as higher sales were said to offset a decline in gross profit margin in Japan due to delays in passing on higher costs caused by yen depreciation to domestic sales pricing and allowed gross profit to increase. However, operating profit declined due to the increase in SGA arising from higher personnel and advertising expenses, which increased globally due in part to the yen depreciation.

Asia Segment
Net sales jumped 22.6 percent to ¥26.0 billion in the first half.

In China, despite another outbreak of COVID, which began in December 2022 and continued until the beginning of Q1, demand for badminton recovered as Yonex restarted tournaments soon after the outbreak subsided. Sales increased partly due to the yen depreciation, although the growth rate in the current H1 was slower than the previous year.

In Taiwan, the company said more opportunities to play badminton among junior players and health-conscious consumers helped badminton sales to remain solid. Also, the remarkable success of Taiwanese athletes in international tournaments also boosted demand, according to the company.

Segment operating profit declined 16.6 percent to ¥3.7 billion as gross profit margin declined due to changes in sales mix. Operating profit decreased due to higher advertising expenses from marketing investments and support for international tournaments, and higher personnel expenses to strengthen the business foundation of its China subsidiary.

North America Segment
Net sales increased 19.1 percent to ¥26.0 billion in the first half.

Badminton sales increased due to strong sales in Q1. Tennis sales declined due to an inventory increase in the overall market since the H2 of FY3/23, mainly in the U.S., and to the abating of the strong growth recorded in the last few years. Overall sales increased due to firm demand for badminton products, as well as the impact of the yen’s depreciation.

Segment operating profit fell 22.3 percent to ¥291 million. An increase in SGA expenses due to investments in advertising and human resources exceeded the increase in gross profit derived from the higher sales and caused operating profit to decline.

Europe Segment
Net sales jumped 34.4 percent to ¥2.2 billion in the first half.

In Germany, tennis sales increased due to the strong market and the attention garnered by tennis magazine awards given to the company’s racquets for their performance evaluations. Badminton sales increased as the holding of international tournaments revitalized the market.

In the UK, sales reportedly increased mainly in badminton equipment on the back of a highly active badminton market, as reflected by the record attendance at the All England Championships tournament held in March.

Segment operating profit was flat at ¥266 million. Gross profit increased due to higher sales, significant improvement in gross profit margin resulting from an improved sales mix, and more efficient logistics. Consequently, the increase in gross profit exceeded the rise in SGA caused by investments in advertising and human resources.

Category Review

  • Badminton comprises 60.5 percent of Yonex sales. The category grew 19.4 percent in the first half to ¥34.9 million.
  • Tennis represents 15.4 percent of Yonex sales. The category slipped 0.5 percent in the first half to ¥8.9 billion.
  • Golf is 1.8 percent of the Yonex business. The category increased 7.6 percent to ¥1.0 billion in the 2024 first half.
  • Other categories, including Apparel, Accessories, Footwear, Snowboards and Sports Cycles, grew 18.4 percent in H1 and now comprises 21.7 percent of the Yonex business.

Photo courtesy Yonex