Mizuno Corp. for the second year in a row lowered its fiscal full-year forecast after weak fiscal third quarter sales brought new realities of the business into focus. The company reported last week that the declines in the golf business had moved into positive territory again, but declines continued in the Americas and Japan. Decreased apparel sales in Japan and China were also cited as contributing factors.
For the fiscal year ending March 31 Mizuno now expects to post a ¥1.0 billion profit for the year versus previous estimates for a ¥2.4 billion profit. The result would result in a swing to profitability versus a loss of ¥2.4 billion in fiscal 2008. Revenues are now forecast to come in at ¥145 billion, down from the previous forecast of ¥160 billion and a 10.5% decrease from the ¥162 billion in revenues posted in fiscal 2008.
Though Mizuno only reports YTD results for the period, a comparison to H1 results shows fiscal Q3 sales for the quarter ended December 31 fell 9.9% to ¥34.6 billion ($385 mm) from ¥38.4 billion ($396 mm) for the year-ago period. The decline came on top of an 11% decline in the prior year period. Gross margins improved 70 basis points to 41.3% of net sales from 40.6% last year. The company swung to a net profit of ¥0.1 billion ($1 mm) after a year-ago net loss of ¥1.4 billion ($14 mm).
Europe was the bright spot for Mizuno in fiscal Q3, jumping 21.4% to ¥1.7 billion ($19 mm), but the volume was not enough to offset declines elsewhere. Revenues in Japan declined 8.1% to ¥26.1 billion ($291 mm) for the quarter, while the Americas fell 17.5% to ¥4.7 billion ($52 mm) and Asia revenues dropped 31.0% to ¥2.0 billion ($22 mm), due to a large decline in China.
On the product side, the Baseball business had the least amount of pain, dipping just 1.4% to ¥7.1 billion ($79 mm). The Sport Apparel business declined 9.6% to ¥6.6 billion ($74 mm) and Sports Footwear fell 14.3% to ¥6.0 billion ($67 mm) for the quarter. Worldwide Gold revenues decreased 13.3% to ¥6.5 billion ($72 mm) for the period.
