Mizuno Corp.’s net earnings dropped 37.6 percent in its fiscal year ended March 31, to ¥2.1 billion ($19.2 million). Sales grew 4.8 percent to ¥196.1 billion ($1.8 billion).
The Japanese sporting goods giant’s gross margins were impacted by a weakening yen against many currencies as well as a slump in the performance-running market in the United States.
The results were slightly below the company’s guidance given on February 5, calling for net income of ¥2.5 million and sales of ¥197 million.
In the Americas region, sales reached ¥31.6 billion ($289.6 million), up 6.7 percent. Sales were down 5.3 percent on a currency-neutral basis. The region showed an operating loss of ¥1.32 billion ($12.1 million) against earnings of ¥165 million a year ago. Net income declined 5 percent on a currency-neutral basis.
Footwear was sluggish in the Americas region “due to excessive distribution stock in the performance-running-shoe market in North America.” Revenue in Brazil was sluggish due to unstable economic conditions in the nation. On the brighter side, golf delivered better results than the previous year.
In its home market of Japan, sales were ¥126.4 billion ($1.16 billion), up 3.2 percent. Strength was seen in team sports and ¥3.9 billion ($35.7 million). Gross margins were impacted by the eroding yen but remained at the same level as the previous year due to cost reductions and price adjustments. Winter merchandise was soft due to warm weather.
In Europe, sales eased 0.4 percent to ¥16 billion ($146.6 million) while advancing 1.8 percent on a currency-neutral basis. The region recorded a loss of ¥364 million ($3.3 million) against a profit of ¥856 million the prior year. Net income rose 2 percent on a currency-neutral basis. Gross margins in the region fell as costs rose due to the effects of cheap European currencies. Footwear sales continued to be strong and Mizuno Norge was established to support growth in Northern Europe.
In the Asia and Oceania region, sales were ¥22.2 billion ($203.4 million), up 16.9 percent on a reported basis and 8.1 percent on a currency-neutral basis. Operating income slumped 32.7 percent to ¥763 million ($7 million) while rising 8 percent on a currency-neutral basis. Gross margins were again challenged by currency fluctuations although Taiwan and South Korea continued to be strong.
For the current year ended March 31, 2017, net sales are projected to reach ¥200 billion, up 2 percent. Net income is projected to reach ¥3.5 billion, which would represent a gain of 66.7 percent. For the year ended March 31, 2018, sales are expected to reach ¥215 billion and earnings, ¥7.5 billion.
