Sales of the footwear business, including running shoes and apparel, remained strong. The golf business was back on course for a recovery in Japan and the United States, and sales increased in an entire area on a currency-neutral basis, amid a difficult market environment.
Two major factors for the decline in operating profit were an increase in selling, general, and administrative expenses attributable to active investments in the year of the Olympics and higher purchasing costs.
Both factors were within the range of expectations and Mizuno minimized the fall in profit margin by expanding sales. In the second half, the Company will boost sales and take steps to improve profits.
Breakdown by geographic market
In Europe, which continued to grapple with the financial crisis, double-digit growth in sales on a currency-neutral basis was achieved in the United Kingdom and France through efforts to boost demand for footwear and sports apparel products.
In golf, Mizuno used Luke Donald and MP-59 iron for its marketing, and orders increased in Custom Fitting. However, sales declined because of weak consumption.
In the Americas, overall revenue increased by 6 percent on a currency-neutral basis.
Breakdown by categories
Running was once again the lead revenue source, with high value-added products like “Wave Rider 15” running shoe performing well. The Wave Rider 15 was the champion product in the “A Brilliant Run” marketing campaign that ran during the Spring buying season. Sales increased not only in running specialty shops but also at channels of Big Box National Sporting Goods Retailers.
In golf, sales were driven by a successful “The Iron Truth” integrated marketing campaign of the MP-59 and MP-69 irons. The campaign also led to an increased higher demand for Custom Fitting, and the business saw an increase of brand value thanks to the good showing of Luke Donald and Stacy Lewis.
In Japan where consumer spending was improving, albeit modestly, sales were up 3.2 percent.
Running shoes for intermediate and advanced runners drove the overall footwear business. Sales of footwear and apparel products for soccer and volleyball among others remained firm, backed by the strong showing of Mizuno’s contracted players and teams in Japan. Sales of walking shoes also remained strong, reflecting growing health consciousness.
In golf, which was driven by the strong performance of Custom Fitting, profits rose significantly.
Forecast for Fiscal 2012
With Senoh Corporation being made a wholly owned subsidiary, Mizuno has revised its forecast for fiscal 2012 from revenue of 160 billion yen and net income of 3.6 billion yen to revenue of 167 billion yen and net income of 3.8 billion yen.