Mizuno's Profits Rebound in Fiscal Nine-Month YTD

Mizuno Corp reported revenue totaled ¥132.2 million ($1.31 bn) in the nine months ended Dec. 31, up 9.3 percent compared with the same period in the previous fiscal year. Operating profit stood at ¥3.6 billion ($35.5 mm), up 52.5 percent. Ordinary profit was ¥4.0 billion ($39.5 mm), up 51.1 percent, and net income was ¥2.1 billion ($20.7 mm), up 52.1 percent.

The major factors for the sharp recovery were the solid performance of lifestyle sports products (such as running-related products) across the globe and a recovery in the golf products business in the Americas.

Although the gross margin declined 0.7 points because of higher costs such as raw materials and personnel expenses, operating profit, ordinary profit and net income all increased significantly as a result of our efforts to curb SG&A expenses with the aim of strengthening cost control.

Mizuno doesn't break out third-quarter figures. Subtracting six month results from nine month figures indicates that sales in the third quarter grew 10.9 percent to ¥43.9 million ($433.7 mm) from ¥39.6 million. Operating earnings reached ¥1.02 billion ($10.0 mm) against a loss of ¥627 million in the same three-month period a year ago. Net income was ¥758 million ($7.5 mm) versus a loss of ¥331 million.
Japan

• In its home region, Japan, sales grew inched up 0.5 percent to ¥90.9 billion ($898 mm). Operating profits jumped 36.1 percent to ¥2.07 billion ($20.4 mm).
• Running shoes and training apparel goods, among others, remained strong.
• The operating profit gain was due to the contribution of the control of SG&A expenses.
• In the third quarter, sales eased 1.7 percent to ¥29.2 billion (xx) from ¥29.7 billion. The region netted an operating profit of ¥542 million against a loss of ¥499 million.

The Americas

• In the Americas, revenues improved 31.6 percent to ¥22.3 billion ($220.3 mm) and grew 9.0 percent on a (currency-neutral) C-N basis. Operating profits climbed 67.5 percent to ¥1.09 billion ($10.8 mm).
• Running shoes continued to be strong in the Americas. In particular, MIZUNO WAVE, Mizuno’s own function, was highly praised and performed well in both South and North America.
• WAVE SAYONARA, a new product launched in July, won awards from major running specialty journals and gained significant support from runners.
• The golf and volleyball businesses also contributed to higher revenue. In particular, the golf business boosted sales by nearly 20 percent for the second consecutive year and Mizuno irons have achieved record market share, entering the upward momentum.
• A combination of superior products and strong marketing campaigns contributed to the growth in the running and golf businesses.
• In the third quarter, sales grew 38.0 percent to ¥7.23 billion ($7.14 mm) from ¥5.24 billion. Operating earnings reached ¥248 million ($2.45 mm) against a loss of ¥8 million.

Europe

• In Europe, sales jumped 42.1 percent to ¥10 billion ($98.8 mm) and gained 20.0 percent on a currency-neutral (C-N) basis). The region showed an operating profit of ¥180 million ($1.8 mm) against a year-ago loss of ¥57 million.
• The performance of running-related products remained firm. In particular, they gained strong support in the French market. In addition, as the company took steps to increase demand for indoor sports-related footwear products such as volleyball and handball.
• Although the Company consolidated a local subsidiary in Spain the third quarter its impact was minor.
• In the third quarter, sales nearly doubled to ¥3.5 billion ($34.6 mm) from ¥1.77 billion. Operating earnings reached ¥16 million ($158,000), rebounding from a loss of ¥258 million.

Asia/Oceania

• In the Asia/Oceania region, sales reached ¥9.05 billion ($89.4 mm), up 38 percent on a reported basis and ahead 18.1 percent on a currency-neutral basis.
• Operating profits advanced 15.9 percent to ¥277 million ($2.74 mm).
• In the third quarter, sales improved 39.4 percent to ¥4.0 billion ($49.5 mm) from ¥2.87 billion. Operating earnings climbed 57.0 percent to ¥248 million ($2.45 bn) from ¥158 million

Categories

By category, Footwear sales increased 23.1 percent to ¥40.3 billion ($398.1 mm). Apparel sales inched up 0.1 percent to ¥41.2 billion ($407 mm). Equipment revenues (baseball, golf, etc.) rose 2.8 percent to ¥31.0 billion ($306.3 mm). Other/Services sales (sales and construction of facilities, devices, instruments, equipments to be used in sports ground, arena, gymnasium and school business) advanced 16.6 percent to ¥19.7 billion ($194.6 mm).

Forecast for Fiscal 2013

・ Consolidated results forecast for the fiscal year ending March 2014 is as follows: Revenue of ¥183.0 billion, operating profit of ¥5.5 billion, ordinary profit of 5.5 billion yen and net income of ¥2.1 billion.
・ No change.


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