12 May Asics Sees 12 Percent Q1 Growth In North America
Asics reported that despite strong sales in North America, net sales decreased 1.1 percent to ¥105,329 million ($822 mm) due to production disruptions caused by shutdown of some factories. In North America, sales increased 12.2 percent to ¥21,112 million ($165 mm).
The gains in North America were due to strong sales of the Performance Running category and Core Performance Sports category. North America segment loss amounted to ¥774 million mainly due to a deterioration in the gross profit ratio caused by the increase in logistics costs and the increase in Selling, General and Administrative expenses resulting from higher e-commerce sales.
In other regions, sales in Japan decreased 11.7 percent to ¥26,933 million due to weak sales in all categories.
Segment income decreased 42.6 percent to ¥1,447 million mainly due to the impact of the decrease in
net sales.
Net sales in Europe decreased 0.7 percent to ¥30,894 million due to weak sales of Sports Style category and Onitsuka Tiger category. Segment income decreased 26.3 percent to ¥4,052 million mainly due to a deterioration in the gross profit ratio and the increase in advertising expenses.
Net sales in Greater China were ¥13,579 million, same level year on year, due to weak sales of Onitsuka Tiger category despite strong sales of Performance Running category. Segment income increased 4.3 percent to ¥3,621 million mainly due to an improvement in the gross profit ratio of products for wholesale and retail.
In the Oceana region, net sales decreased 4.1 percent to ¥7,364 million due to weak sales of all categories other than Performance Running category. Segment income increased 2.2 percent to ¥1,447 million mainly due to an improvement in the gross profit
ratio.
In the Southeast and South Asia regions, net sales increased 45.3 percent to ¥3,641 million due to strong sales of the Performance Running category and Onitsuka Tiger category. Segment income increased significantly 280.6 percent to ¥629 million due to an improvement in the gross profit ratio, as well as mainly due to the increase in net sales.
In Other regions, net sales increased 23.0 percent to ¥9,227 million due to strong sales of the Performance Running category and Sports Style category. Segment income increased 73.9 percent to ¥715 million mainly due to the impact of the increase in net sales.
Companywide, profit attributable to owners of parent decreased 16.8 percent to ¥8,725 million mainly due to the impact of the decrease in net sales and profit.
Gross profit decreased 1.1 percent to ¥52,601 million due to the impact of the decrease in net sales. Operating income decreased 31.1 percent to ¥10,057 million mainly due to an increase in commission fee, as well as due to the decrease in net sales. Ordinary income decreased 25.3 percent to ¥11,000 million.
Asics wrote in its statement, “Although there are concerns about the various effects of the novel of coronavirus disease (COVID-19) this quarter, efforts to normalize socioeconomic activities are underway in many parts of the world. Production impacted by the spread of COVID-19 in last year, the shortage of products in this Q1 has been already factored into the plan. Despite the logistics disruption in various regions and the impact of lockdown in Shanghai and other areas, Net sales remained at the same level as the same period of the previous year. However, Net sales exceeded our plan. Under these circumstances there has been confusion over the situation in Russia and Ukraine. However, the scale of Asics Russia and Ukraine operations are small and the impact on business performance has been minimal.”
By category:
- Performance Running: Net sales increased 7.9 percent to ¥58,779 million due to strong sales in all regions other than Japan. Category profit decreased 7.5 percent to ¥13,285 million mainly due to a decline in the gross profit ratio.
- Core Performance Sports: Net sales decreased 24.7 percent to ¥10,223 million mainly due to the impact of shutdown of some factories. Category profit decreased 49.6 percent to ¥1,540 million mainly due to the impact of the decrease in net sales.
- Sports Style: Net sales decreased 8.2 percent to ¥8,117 million mainly due to the impact of shutdown of some factories. Category profit decreased 20.7 percent to ¥1,345 million mainly due to the impact of the decrease in net sales, despite an improvement in the gross profit ratio.
- Apparel and Equipment: Net sales were ¥8,733 million, same level year on year, due to strong sales in all regions other than Japan. Category profit decreased 69.9 percent to ¥175 million due to the impact of the decrease in the gross profit ratio and the increase in selling, general and administrative expenses.
- Onitsuka Tiger: Net sales decreased 11.6 percent to ¥8,735 million due to the decrease in sales in the Greater China region, affected by lockdown in Shanghai and other areas. Category profit decreased 9.2 percent to ¥1,852 million mainly due to the impact of the decrease in net sales, despite an improvement in the gross profit ratio.
Asics maintained its forecast for the year. Sales are expected to reach ¥420,000 million, up 3.9 percent. Operating income is expected to be ¥23,000 million, a gain of 4.8 percent. Net income is expected to reach ¥13,500 million, up 43.6 percent.