Asics Corp. Racks Up Strong Double-Digit Growth for Fiscal Year

Asics Corp reported 2014 fiscal year revenues jumped 26.6 percent in Japanese yen terms to ¥329.5 billion ($3.99 bn) for the period ended March 31. Domestic Japan net sales rose 4.7 percent to ¥119.8 billion ($1.45 bn), primarily due to the “steady sales of walking shoes and Onitsuka Tiger shoes accompanying the expansion of directly managed sales venues, in addition to the strong sales of running shoes and baseball equipment.”

Overseas sales increased 37.9 percent to ¥229.1 billion ($2.77 bn), due to strong sales of running shoes in the Americas, Europe and the other regions and the effect of FX rates.

Gross margins improved 10 basis points to 43.8 percent of sales, mainly due to the increase in net sales. SG&A expenses increased improved 80 basis points to 35.8 percent of sales, primarily due to an increase in advertising expenses.

As a result, operating income jumped 75.3 percent to ¥26.5 billion ($321 mm). Net income for fiscal 2014 increased 17.0 percent to ¥16.1 billion ($195 mm), which was said to be 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.”

Full-year sales in the Americas region reached ¥94.5 billion ($1.14 bn), up 40.9 percent in yen terms and 15.9 percent on a currency-neutral (C-N) basis due to the “strong sales of running shoes and the effect of foreign exchange rates.”

Operating income expanded 75.3 percent in yen terms (+44.2 percent C-N) to ¥8.32 billion ($101 mm).

In Europe, full-year sales jumped 37.8 percent to ¥85.2 billion ($1.03 bn) but grew 10.0 percent in currency-neutral terms, “thanks to the strong sales of running shoes and the effect of foreign exchange rates.” Operating profits were up 13.8 percent to ¥7.55 billion ($91 mm) primarily due to “the effect of foreign exchange rates on purchasing costs and an increase in selling, general and administrative expenses due to new openings of directly managed stores.”

In currency-neutral terms Asics posted a 9.2 percent decline in operating profit in Europe for the fiscal year.

Oceania area revenues rose 13.7 percent (C-N) to ¥15.1 billion ($183 mm) due to the “strong sales of running shoes and the effect of foreign exchange rates.”

Oceania operating profit improved 26.0 percent (+11.5 percent C-N) to ¥3.23 billion ($39 mm). East Asia region revenues grew 36.2 percent in reported currency terms to ¥23.8 billion ($288 mm). The gain was said to be due to strong sales of fitness walking shoes and Onitsuka Tiger shoes, in addition to the effect of foreign exchange rates. Region operating income jumped 36.8 percent to ¥1.25 billion ($15 mm) due to the improvements of the cost of sales ratio.

In the Other Business segment, sales increased 31.7 percent (+5.0 percent C-N) to ¥10.8 billion ($131 mm) due to the “steady” sales of outdoor wear under the Haglöfs brand and other products and the effect of foreign exchange rates. The region posted an operating loss of ¥574 million ($6.9 mm), compared to a loss of ¥56 million ($678,000) in fiscal 2013.

By press release