Asics is enjoying a brisk run in Europe, the Middle East and Africa (EMEA), where its sales increased by 16.0 percent for the first half of this year, driven by buoyant sales of both footwear and apparel in the running and tennis categories.
Sales of running shoes jumped by 17.9 percent while apparel sales inflated by 28.7 percent, with particularly strong sales of women's apparel. The numbers indicate that Asics is getting some traction in the apparel category at last. They refer to sales in constant currencies and exclude Haglöfs, the Swedish outdoor brand owned by Asics.
On the same basis, sales advanced at solid single-digit rates in Germany, the Benelux countries, Austria, Norway and Russia, while the company achieved double-digit sales expansion in France, Spain, Italy, the U.K., Sweden, Denmark and Poland. Sales in the group's own stores soared by 44.3 percent, aided by several store openings.
Asics intends to capitalize on this growth by investing in marketing with its “Better your best” advertising campaign, which focuses on Asics' performance-enhancing apparel. The investments will include TV commercials. The brand also had an editorial partnership with Eurosport for the European Athletics Championships in Zurich last week. Asics is the sponsor of the Dutch, French, Italian and Finnish athletics federations.
Asics Europe states that the entire Asics group reported a consolidated sales increase of 23.5 percent to 161.6 billion yen (€1.2bn-$1.6bn) for the first quarter of its financial year until the end of June, which was a rise of 13.9 percent in constant currencies. Its operating income advanced by 21.5 percent to ¥20.1 billion (€146.5m-$195.7m), up by 14.0 percent in constant currencies.
However, the figures put out by Asics are muddled by the fact that it has started changing its fiscal year so that the figures for this quarter are not actually comparable with the months from April to June last year. They include sales from April to June for Asics' operating companies in Japan (except for Haglöfs) but sales from January to June for all of Haglöfs and foreign operating companies.
Sales reported by Asics Corporation for the quarter until the end of June increased from ¥76.6 billion (€558.4m-$746.0m) to ¥161.6 billion (€1.2bn-$1.6bn) and the company points to an increase of 15.8 percent (this presumably amounts to a comparable increase but the discrepancy with the increase of 23.5 percent cited by Asics Europe has yet to be explained). Japanese sales amounted to ¥22.9 billion (€166.9m-$23.0m), against ¥138.7 billion (€1.0bn-$1.35bn) for foreign sales. For the operating income the company reports a rise of 2.4 percent ¥20.1 billion (€146.5m-$195.7m), while its net income for the quarter until the end of June landed at ¥14.4 billion (€105.0m-$140.2m), up by 33.4 percent.
Another breakdown of sales provided by Asics Corporation points to a quarterly turnover of ¥27.2 billion (€198.3m-$264.9m) in Japan, which was a decrease of 1.5 percent, while operating income in this segment shrank by 60.5 percent to ¥387 million (€2.8m-$3.8m). Due to the adjustment of the fiscal year, Asics did not provide any comparisons for other regions. Sales in the America region reached ¥57.5 billion (€419.2m-$560.0m) with operating income of ¥6,349 million (€46.3m-$61.8m). For Europe the operating income landed at ¥5,230 million (€38.1m-$50.9m) for sales of nearly ¥52.4 billion (€381.9m-$510.3m). Oceania, South East and South Asia generated sales of ¥8.8 billion (€64.1m-$85.7m) with operating income of ¥1,659 million (€12.1m-$16.1m). East Asia sales amounted to ¥15.2 billion (€110.8m-$148.0m) while operating income reached ¥1,512 million (€11.0m-$14.7m). As for other business, covering Haglöfs, it delivered sales of ¥4,942 million (€36.0m-$48.1m) but an operating loss of ¥632 million (€4.6m-$6.1m).
The company said it benefitted from continued enthusiasm for running and an economic pick-up in the U.S. market. It launched two more technical running shoes, sponsored marathons and its own trail running event. Asics has also highlighted its involvement in rugby by launching jerseys for the South African and Australian rugby teams. Separately, the company opened 16 stores in the period, including Melbourne and Tsukuba, in Japan, and pushed its online sales business.
In an interesting cultural shift, the Japanese company adds that it has put an end to seniority-based appointments and put in place a new human resources policy that is meant to fast-track talent development. The policy will also favor increased diversity at Asics.
The group predicts sales of about ¥251 billion (€1.8bn-$2.4bn), operating income of ¥26.5 billion (€193.1m-$258.1m) and net income of ¥17 billion (€123.9m-$165.6m) for the first half of its fiscal year (actually covering the first nine months for the foreign subsidiaries and all of Haglöfs). For the full year, the forecast is that sales will reach about ¥335 billion (€2.4bn-$3.3bn), with operating income at ¥27.5 billion (€200.4m-$267.8m) and net income at ¥17 billion (€123.9m-$165.5m) (actually covering the last nine months of the calendar year for the operating companies that previously had a fiscal year running until the end of March).
