Strong sales in Europe as well as in the USA helped drive ASICS to revenue growth of 13.7 percent to 194,515 million yen (€1,188m-$1,604m) for its full year ended March 31, 2007. The gross margin was up by 1 percentage point to 43.4 percent. Operating income rose by 23.1 percent to ¥20,248 million (€123.8m-$167m), while net income inched up by 0.5 percent to ¥13,878 million (€84.8m-$114.5m) because of higher taxes payable in the USA.
In Europe, turnover increased by 19.4 percent to ¥61,526 million (€376m-$507m), driven by running footwear and athletic lifestyle shoes. Operating income in the region grew by 22.8 percent to ¥10,865 million (€66.4m-$89m). Sales in the USA, boosted by running shoes, climbed by 34.2 percent to a lower level of ¥43,183 million (€264m-$356m), generating 29.7 percent higher operating income of ¥3,508 million (€21.4m-$28.9m).
ASICS officials claim that their brand is still the fastest-growing athletic label in Europe, with an overall market share of around 5 percent in the footwear market of the five major countries, just behind Reebok, and it stand a chance to take over its ranking in 2007. The company has reached the highest market share in Germany, where it occupies third place, ahead of Puma.
It still has room to grow in Spain and the UK, where it market share is below 2 percent, but it’s making big strides in both countries. Sales grew by triple digits in the past year in Spain, where the staff has been expanded to 24 people, some of whom come from the neighboring office of Nike, and they should double this year.
ASICS is #3 for athletic footwear also in Austria, where it has reached a market share of 44 percent in performance running, higher than in Germany. The Austrian subsidiary, which took over the business from Amer Sports two years ago, has taken over responsibility for the Czech market, starting with shipments for the Fall 2007 season. It had previously taken on the distribution in Slovenia and Hungary.
Footwear still represents 85 percent of ASICS’ sales in Europe, and running is two-thirds of the total business, with women’s styles now growing more than men’s.
ASICS is now trying to develop a certain presence in the football segment, launching a new line of innovative boots that has received an encouraging welcome in Europe for Fall 2007. Its new Lethal range, the only one on the market that has been officially approved by the International Sports Medicine Association, is specially geared to reducing strain and fatigue in order to prevent injuries. Dieter Bauer, president of ASICS Deutschland, has gone on record to state that the brand has the potential to become #3 in the football market, but this looks like a difficult challenge to meet without major investments in sponsorships.
ASICS is progressing much more slowly in its domestic market of Japan, where its sales were up by only 1.6 percent to ¥87,631 million (€535m-$723m) during the last financial year, as strong turnover from footwear and apparel was offset by waning sales of sports equipment. Operating income improved by 11.2 percent to ¥4,344 million (€26.5m-$35.8m). In all other parts of the world revenues grew by 38.2 percent to ¥9,167 million (€56m-$75m), while operating income rose by 29.1 percent to ¥1,940 million (€6.1m-$8.2m).
By category, sales in ASICS’ sports shoe segment increased by 20.0 percent to ¥135,248 million (€826m-$1,116m), aided by strong sales abroad as well as growth in walking shoes in Japan. Sales of sports apparel rose by 3.6 percent to ¥42,672 million (€261m-$352m), driven by strong sales of athletic apparel. Sports equipment revenues fell by 2.9 percent to ¥16,595 million (€101m-$137m), mainly due to weak sales of baseball equipment in Japan.
ASICS’ forecast for the current fiscal year calls for a 9.2 percent increase in revenues to ¥212,500 million and a growth in operating income of 8.7 percent to ¥22,000 million. Net income is projected to grow by 0.9 percent to ¥14,000 million.
Elsewhere in Japan, Descente’s turnover grew by 7 percent to ¥75.09 billion (€459m-$620m), but the Japanese company’s net earnings fell by 10 percent to ¥2.48 billion (€15.2m-$20.5m). Its forecast for the next year includes revenues of ¥78.50 billion and a net profit of ¥2.0 billion.
Goldwin’s turnover slipped by 1 percent to ¥45.81 billion (€280m-$378m), while its profit reached ¥848 million (€5.18m-$7m), as compared to a loss of ¥3.97 billion. For its current full year, the company is calling for sales of ¥47.30 billion and a net profit of ¥1.10 billion.
