Mizuno Shows Modest Gains in Q2

Mizuno Shows Modest Gains in Q2

Mizuno Corp. reported sales in the six months totaled ¥90.0 billion ($779.3 mm), up 1.9 percent compared with the same period in the previous fiscal year. Operating income stood at ¥2.7 billion ($23.4 mm), up 3.9 percent.

Net income before tax totaled ¥2.8 billion ($23.4 mm), up 24.1 percent. The quarterly net income after tax was ¥1.7 billion ($14.7 mm), up 31.4 percent.

Europe and Asia remained solid, mainly centered on running-related products, but in Japan, the activity of products in the mid- to high-price ranges, such as those in baseball and golf, was sluggish in part due to a delay in recovery from the impact of a consumption tax hike.

Gross margin improved by 0.9 point as product development and an improvement in the production
process absorbed the rise in import costs resulting from a weaker yen.

Main regions

・ The footwear business related to running and indoor sports remained especially healthy.
・ Golf continues to face an uphill battle, with continued impact from the golf market’s global slump.
・ Product planning and marketing functions for European sports were moved from England to
Germany. The operation started in May.
・ Net sales ultimately increased 18.7 percent

The Americas
・ The running and golf businesses did not perform well due to the impact of record low temperatures and sluggish sales, but the volleyball business has maintained its healthy performance.
・ Net sales ended up 3.9 percent lower.

・ Performance was healthy overall. The brand for running and lifestyle sports in particular advanced
to firmly establish itself, contributing substantially to earnings. Also, the business restructuring in
China was a success, considerably improving profitability.
・ Net sales ultimately rose 80.0 percent partly due to the effect of transferring the management of agency
business in the Asian/Oceania region to subsidiaries in South Korea and Singapore.

・ The baseball and golf businesses were especially hard hit by challenging conditions, mainly due to
the delay in recovery from a reaction to the tax hike, coupled with inclement weather in the summer.
The shoes business in the health area, such as walking, continued its solid performance.
・ The sports facilities business, which has been expanding, showed solid performance due to an
increase in the number of programs for the elderly and children.
・ Net sales fell 4.8 percent partly due to the effect of the transfer of the agency business for the Asian
region, which was conducted in Japan until last fiscal year, to two consolidated subsidiaries.

Estimate for Fiscal 2014
・ Changes made
・ Net sales: ¥186.0 billion; operating income: ¥5.9 billion; net income before tax: ¥6.0 billion; net income after tax: ¥3.4 billion. Mizuno formerly forecast sales of ¥195 billion, operating income to reach ¥8 billion and net income to come in at ¥5 billion.