Mizuno Corp. reported sales grew 7.8 percent to ¥96.9 billion in the six months through Sept. 30.
Operating income reached ¥1.4 billion, down 46.6 percent. Net income was ¥1.5 billion, down 16.4 percent.
Sales, particularly running shoes, continued to be strong, leading to the sales growth. Costs rose mainly in Japan and Europe due to the effects of exchange rates, leading to the decline in profits.
By region, sales in the EMEA (Europe, Middle East and Africa) improved 10.2 percent to ¥8.52 billion and grew 9.5 percent on a currency-neutral basis. The region showed an operating loss of ¥435 million against earrings of ¥380 million in the same period last year.
In a statement, Mizuno said the EMEA region was helped by improvement in Germany. Overall sales of running shoes and indoor spots shoes (for handball, etc.) continued to be strong. Mizuno sponsored the Hamburg Marathon in Germany to support its running business.
The golf club market in EMEA “remained highly competitive” although Mizuno's new irons, including the MP5, MP25, JPX850 and Boron Forged, “were highly rated, helping to gain a greater share of the market.”
In the Americas region, sales grew 12.6 percent to ¥16.3 billion but were down 3.2 percent on a currency-neutral basis. The Americas region showed an operating loss of ¥68 million against a profit of ¥356 million.
“Sales of new products in the running shoes lineup were strong, helping Mizuno to regain its market share,” said Mizuno in its statement about the Americas. “The partnership with the Atlanta Track Club, one of America’s largest running clubs, also contributed to the recovery.”
Backed by the partnership agreement with the U.S. national volleyball team, sales of all items in the volleyball product lineup also remained strong. Sales of golf items recovered and increased compared with the previous year.
In Asia and Oceania markets, sales grew 25.3 percent to ¥11.4 billion and grew 10.6 percent on a currency-neutral basis. Operating income was reduced 39.4 percent to ¥505 million.
Mizuno said, “In Taiwan, Mizuno’s brand value improved by promotional activities conducted mainly by the directly managed outlets of running shoes that were established last year. Particularly, sales of running apparel and functional tights were strong.”
Chinese operations reduced administrative costs by achieving greater operational efficiency through the merger of the sales and production subsidiaries. In addition, the running shoes business remained strong in China. Mizuno also steadily grew sales in South Korea, Singapore and Australia.
In its home market of Japan, sales grew 3.5 percent to ¥60.8 billion. Operating income improved 28.4 percent to ¥1.46 billion.
Mizuno said of Japan, “Sales continued to be strong in health areas such as running, walking and training shoes, as well as in competitive sports areas and golf.”
The designated management facility operation business continued to perform well. The Senoh Group’s business of tools for athletic facilities also remained strong. Sales of baseball products did not reach the level that had been attained before the nation’s consumption tax rate was raised.
Mizuno reiterated is guidance for the year. The guidance calls for net sales: ¥200 billion; operating income: ¥6 billion; net income before tax: ¥6 billion; and net income after tax: ¥3.7 billion.
