Aided by a focus on high-margin sales and cost controls, Mizuno Corp’s America region returned to profitability for the first time in four years.
The Americas region’s operating income in the year ended March 31 reached ¥160 million ($1.46 mm) against a loss of ¥210 million in FY17. The region had shown a loss of ¥254 million in FY16 and ¥132 million in FY15. It showed a profit of ¥170 million in FY14.
Revenues, however, in the latest year fell 10.0 percent to ¥18.0 billion ($164 mm) from ¥20.0 billion. In its statement, Mizuno noted that sales were down due to a strategy emphasizing profitability. Profitability was also helped by a focus on the optimization of its corporate structure.
From a sales standpoint, Mizuno marked its third year of annual declines in the region. Sales were ¥24.2 billion in FY16 and ¥31.6 billion in FY15.
Extrapolating nine-month results from results for the full year shows sales in the Americas region in the fourth quarter declined 4.2 percent to ¥4 billion from ¥4.2 billion. Profitability comparisons weren’t available.
Going forward, Mizuno said the Americas region plans to focus on expanding sales by developing new products while also emphasizing the reduction in fixed costs.
Companywide, Mizuno’s revenues in the year reached ¥178.1 billion, down 3.9 percent.
Operating profit reached ¥7.6 billion, off 5.2 percent. Ordinary profit reached ¥7.7 billion, down 4.8 percent. Gross margins improved 70 basis points to 41.3 percent. SG&A expenses were also reduced 2.0 percent to ¥67.3 billion but still grew as a percent of sales to 37.0 percent from 36.3 percent a year ago.
Net income was ¥6.0 billion, up 23.1 percent.
Extrapolating nine-month results from results for the full year shows sales in the fourth quarter declined 1.4 percent to ¥50.4 billion. Operating profits improved 10.3 percent to ¥3.2 billion. Net profits reached ¥3.1 billion versus ¥1.6 billion.
In Japan, revenues in the year fell 3.7 percent to ¥124.5 billion from ¥129.3 billion. Operating profits dropped 21.4 percent to ¥5.78 billion from ¥7.35 billion. Mizuno said sales in Japan decreased due to weak sales of sporting goods and golf although the sports facility service business keeps growing.
In the EMEA region, revenue rose 5.6 percent to ¥15.1 billion from ¥14.3 billion. The region showed an operating profit of ¥340 million against break-even results in FY18. Strong sales were seen in indoor sports such as handball and volleyball.
In the Asia/Oceania region, revenues eased 1,9 percent to ¥20.5 billion from ¥20.9 billion. Operating income was ¥1.23 billion against ¥990 million. The sales decline was attributed to weakness in the running business in China and Taiwan.
For the current year, sales are expected to reach ¥185.0 billion, up 3.9 percent. Ordinary income is expected to be ¥8.5 billion, up 10.4 percent. Mizuno said its focus in Japan will be on the “expansion of new business fields such as working goods and non-sports products.” Overseas, the focus will be “working on recovery of running business.”
Photo courtesy Mizuno