Mizuno Corp. reported earnings slid in its fiscal year ended Mar. 31 due
mainly to an increase in SG&A expenses and in purchasing costs. But
overall footwear sales remained healthy, especially running shoes in
the Americas.

In the Americas region, sales in the year were up 12.5 percent to
¥23.0 billion ($278 mm) and grew 12.4 percent currency-neutral. The
top-line gains were driven by the strength of running footwear and golf
businesses. Operating profits before taxes were down 5.3 percent to
¥902 million ($11 mm).

In an interview with Sports Executive Weekly,  Bob Puccini, president of Mizuno USA Inc., said Mizuno USA continued its strong growth in the last three years and achieved all-time high record net sales.

The Running business in the Americas region increased by 24 percent on a
currency-neutral basis, driven by innovative new products and strong
brand marketing strategies. In 2012, in U.S. running specialty stores,
the company was the fastest growing brand of running shoes. Based on
retail point-of-sale data compiled by SportScanInfo, Mizuno picked up
240 basis points in running footwear share in running specialty retailer
(RSR) stores in the trailing 52- week period ended May 11. The brands
running footwear sales at retail grew over 50 percent in the period for
both the RSR channel and overall.

“MUS Running net sales was an all-time high record,” said Puccini. “2012 was the third year in a row with strong double digit net sales growth.”

He noted that according to Sports Marketing Surveys, in the US Running Specialty Stores, Mizuno was the fastest growing brand of running footwear, showing retail sales growth of 30.1 percent in 2012.  In the second half of 2012, Mizuno growth in this key channel was even faster at nearly three times the growth rate of the category retail sales. 

“This momentum sets up Mizuno for continued market share growth in 2013,” said Puccini. “Mizuno running footwear growth is driven by new, innovative shoes that are developed with a just enough design approach and by the Mezamashii Run Project marketing campaign that emotionally resonates with runners of all levels.  The success of the campaign was recognized by five Effie Awards.”

Sales in the Golf business in the Americas region grew at a healthy rate
of 7 percent on a currency-neutral basis, driven by the innovative
Mizuno Performance Fitting System, world-class iron line up, and an
industry leading two- day turn around on all custom orders.

In the golf category, Mizunos custom fitting side of the business continued to be the key reason for growth in the U.S., driven by the innovative Mizuno Performance Fitting system, world class iron line-up, and an industry leading two-day turnaround on all custom orders, said Puccini.

“Mizuno golf continued their legendary performance in Golf Digests Hot List by scoring a Gold Medal in every iron category in 2012. The MP-59 won Gold in the Players Iron category, the JPX-800 Pro was Gold for Game Improvement irons, and the JPX-800 HD took home Gold for Super Game Improvement irons while also being named the highest rated iron in its class in Golf Magazines 2012 Club Test Mizuno Golf significantly grew wedge sales, showing momentum outside of irons.”

In the team category, MUS Diamond and Volleyball net sales were up slightly in a tough competitive environment. Said Puccini, “In December, Mizuno renewed a multi-year contract with USA Volleyball
through 2016 Olympic Games in Rio.  In addition, the agreement was expanded to include USA Beach Volleyball in competitive apparel and select accessories.”

Companywide, Mizuno Corp. reported earnings slid in its fiscal year ended Mar. 31 due mainly to an increase in SG&A expenses and in purchasing costs. But overall footwear sales remained healthy, especially running shoes in the Americas.

Companywide, revenue totaled ¥163.7 billion ($1.98 billion) in the year, up 5.6 percent compared with the same period of the previous fiscal year. Operating profit was ¥3.6 billion ($44 mm), down 34.4 percent and net income was ¥1.9 billion ($24 mm), down 38.1 percent versus fiscal 2012.

Extrapolating nine-month results from the full year, revenues in the latest quarter rose 6.5 percent in the three- month fourth quarter, to ¥42.7 billion ($464 mm). Operating earnings climbed 32.1 percent to ¥1.25 billion ($14 mm) but net earnings slid 29.0 percent to ¥576 million ($6.3 mm) due to higher interest expense.

For the fiscal fourth quarter ended March 31, Mizuno sales in the Americas jumped 36.7 percent in yen terms to ¥6.10 billion ($66 mm).
In Europe, revenues for the year were down 2.9 percent to ¥10.4 billion ($126 mm) or down 3.6 percent C-N. Operat- ing income before taxes was down 43.9 percent to ¥304 million ($3.7 mm). The revenue declines were attributed to sluggish economies in the region. In addition to running shoes, indoor shoes such as handball shoes, remained strong in the region.

In Japan, full-year sales were up 5.9 percent to ¥121.7 billion, ($1.47 bn) mainly attributable to Senoh Corporation, which joined the Mizuno Group in July 2012. Operating profits before taxes were down 24.1 percent to ¥2.56 billion ($31 mm) in Japan. Golf sales in Japan were sustained as the Custom Fitting business continued strong. Sales for running shoes and apparel products for multi-training grew in Japan.

In the Asia/Oceania segment (China/Taiwan/ Australia) sales were down 4.1 percent to ¥8.55 bil- lion ($104 mm) and down 5.3 percent C-N. The re- gion posted an operating loss of ¥53 million ($641,000) versus a profit of ¥591 million ($7.5 mm) in the prior year.

For the fiscal year ending March 2014, the revenue forecast is ¥183.0 billion (up 11.8 percent from the this past fiscal year) and the ordinary profit forecast is ¥7.0 billion (up 70.9 percent).

The revenue forecast for Japan is ¥128.5 billion (up 5.5 percent), for Europe is ¥14.5 billion (up 39.4 per- cent) and for the Americas is ¥29.0 billion (up 26.0 percent).