Unwavering demand for running products enabled Asics to lift its sales by 6.5 percent to ¥123,935 million yen (€1,149m-$1,583m) for the first half of its fiscal year, until the end of September, but the expansion slowed down in the second quarter and the group's profits were on the slide.
The Japanese brand's domestic sales rose by 4.3 percent to ¥43,231 million (€400.6m-$552.3m), driven by strong sales of running and basketball shoes. Meanwhile, its international sales jumped by 7.6 percent to ¥80,703 million (€747.9m-$1,031m). However, this turnover was inflated by the consolidation of Haglöfs, the Swedish outdoor brand acquired last July, and Asics Canada.
A separate table based on slightly different parameters than the above split between Japan and international sales showed that Asics lifted its European sales by 8.6 percent to ¥31,723 million (€294.0m-$405.2m), equivalent to a rise of 14.5 percent in constant currencies for the first half. Meanwhile, its American sales dipped by 0.8 percent in yen to ¥31,256 million (€289.6m-$399.3m), but they would have increased by 10.6 percent in constant currencies. The Other business, which consists of Haglöfs, generated sales of ¥3,288 million (€30.5m-$42.0m) for the period.
The Asics group's gross profit expanded by 5.8 percent to ¥54,512 million (€505.2m-$696.4m), due to its enlarged turnover. Then again, its expenses increased even faster, at a rate of 10.6 percent for the first half, which was attributed to a rise in advertising expenses, as well as amortization expenses for goodwill and intangible assets arising from business circumstances in the previous fiscal year. Asics decided to spend more on advertising as part of its five-year expansion plan, and in view of the weak recovery in Europe and America, along with the impact of the earthquake that hit Japan earlier this year.
Its operating income therefore decreased by 9.6 percent to ¥11,604 million (€107.5m-$148.2m). Operating income was down by 22.6 percent in Europe to ¥4,311 million (€40.0m-$55.1m) and by 19.2 percent in America to ¥2,121 million (€19.7m-$27.1m). Without exchange rate changes, the drop would have reached 18.4 percent in Europe and 9.9 percent in America. Furthermore, Asics reported an operating loss of ¥465 million (€4.3m-$5.9m) for Haglöfs.
The company ended the half year with a net profit of ¥5,106 million (€49.1m-$65.2m), down by 7.3 percent. Since it reported a profit of ¥5,174 million in the first quarter, this implies that the group suffered a small loss of ¥68 million in the second quarter.
Asics predicts that it will reach sales of about ¥250,000 million (€2,317m-$3,194m) for the full fiscal year, up by 6.2 percent, while its operating income will rise by 5.0 percent to ¥20,500 million (€190.0m-$261.9m), but it will end the year with net income of ¥11,000 million (€101.9m-$140.5m), which would be a slight decline of 0.4 percent.