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Asics with two digits growth on net sales and net income

Jun 24, 2014 / Japan
Asics with two digits growth on net sales and net income
The Japan based company announced consolidated net sales up by 26.6% reaching 2 375.7 million euros for year ending March 2014. Net income totaled 116.2 million euros, up by 17.0%
According to the statement issued by the company: “the ASICS Group continued its efforts to reinforce and expand its business on a global scale based on the Five-Year Strategic Plan” (ASICS Growth Plan (AGP) 2015). Based on its mid-term strategic plan, the company aims to reach at least 2 884.3 million euros in consolidated net sales for fiscal 2015. For the last financial year consolidated sales grew 26.6% and totaled 2 375.7 million euros, with two digits growth across all geographic areas. Company sales were negatively impacted by the performance of the yen, as highlighted by the official statements.



Consolidated net income rose 17.0% to 116.2 million euros, which, according to the company “was primarily due to the recording of gain on sales of property, plant and equipment arising from the sale of the land of former Kanto Kashiwa Distribution Center and plant of a subsidiary, and also due to the recording of income taxes refunded in the corresponding period of the previous fiscal year”.

Sales in Japan reached 863.8 million euros, up by 4.7%, and operating income for the region was 21.2 million euros, resulting in a 31.6% deterioration. According to the statement issued by the company the increase in domestic sales was mainly due to the steady sales of walking shoes and Onitsuka Tiger shoes, in addition to the strong sales of running shoes and baseball equipment.

In the Americas sales were up by 40.9% (15.9% if the currency fluctuation effect is removed and previous fiscal year’s foreign exchange rate used) to 681.4 million euros. In fact, the effect of foreign exchange rates explains the variation rate, alongside with the strong sales of running shoes. Operating income for the region increased 75.3% (44.2% using the previous fiscal year’s foreign exchange rate) to 60.0 million euros, mainly due to improvements of the cost of sales ratio.

Europe’s revenue increased 37.8% (10.0%, currency neutral) to 614.6 million euros, mainly driven by strong sales of running shoes and the effect of foreign exchange rates, and the income generated in the segment was up by 13.8% (it would have been a 9.2% decrease in currency neutral scenario) to 54.4 million euros. This result was impacted by an increase in selling, general and administrative expenses due to new openings of directly managed stores.

Sales in the Oceania area were up 28.4% (13.7%, currency neutral) to 108.9 million euros, due to strong sales of running shoes and the effect of foreign exchange rates; net income for the region increased 26.0% (11.5% using the previous fiscal year’s foreign exchange rate) to 23.3 million euros.

East Asia sales grew by 36.2% (9.2% using the previous fiscal year’s foreign exchange rate) to 171.4 million euros, due to the strong sales of fitness walking shoes and Onitsuka Tiger shoes, in addition to the effect of foreign exchange rates. Improvements of the cost of sales ratio resulted in enhanced income (up 36.8% (9.9%, currency neutral) to 9.0 million euros).

In terms of the marketing strategy the group is focusing on heighten the Asics brand and enhance the corporate image. Actions taken include: supporting marathon events held in different parts of the world and supplying products to national delegations and athletes participating in international sports events. Other commercial actions involved the opening of flagship stores in Osaka, Kobe and Sydney, and the beginning of ecommerce sales.

The company has a scheduled change for their fiscal year, which will now end on the 31st of December from 2014 onwards. When forecasting the performance for the current Fiscal Year, it can be read on the official statements: “In the sporting goods industry, business is expected to remain steady on the back of a high level of interest in sport owing to rising health consciousness, as well as a running boom. Under these conditions, the ASICS Group will swiftly respond to an increasingly globalized business environment and pursue continuous growth by working on expanding its businesses in North America which is the largest market in the world, and Latin America, which is a rapidly growing market, further strengthening its global headquarter function, and reinforcing and enlarging its businesses in Japan, based on the Five-Year Strategic Plan, “ASICS Growth Plan (AGP) 2015.”

Shares of the company were last traded at 17.2 euros the Tokyo Stock Exchange on the 23rd of June 2014.

For more information about the company please visit the website.

Please note Asics posts their results in Japanese Yen; Exchange rate Japanese Yen - Eur as presented by the European Central Bank on the 20th of June has been applied.

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