Asics reported higher sales and operating income in several key regions for the second quarter of 2021. The progress was led by Europe, where revenues increased by 56 percent in Japanese yen, followed by increases of 51 percent in North America as well as Greater China as compared to the last year.
In terms of products, the growth was driven by the Performance Running category of footwear in each region as well as the Onitsuka Tiger brand. In these two categories, Asics’ quarterly sales were up by more than 50 percent and by 34 percent, respectively, as compared with the same period a year ago. Compared with the first quarter of 2019, Performance Running was up by 34 percent. Sales were also higher than in 2019 in other categories expect for Onitsuka Tiger and Apparel & Equipment.
Revenues from e-commerce went up by 36 percent globally in the quarter, with increases of 57 percent in Europe, 49 percent in Japan and 19 percent in North America.
Despite the lingering effects of Covid-19, the company’s total net revenues rose by 42.6 percent to 209,478 million yen (€1,615m–$1,900m) in the quarter. The gross profit increased at a higher rate of 49.4 percent to ¥105,448 million (€812.2m-$956.9m), or 50.3 percent of sales.
Asics booked operating income of ¥23,993 million (€185,001m-$217.7m) for the quarter, or a margin of 11.4 percent of sales, against an operating loss of ¥3,873 million in the year-ago period. The bottom line showed attributable net income of ¥12,350 million (€85.3m-$112.1m) compared with a loss of ¥6,266 million. The latest quarterly results included a loss of ¥5.2 billion from temporarily closed stores that could not reopen during the period because of Covid.
More detailed figures were provided by the group for the first six months of this year. Revenues from Performance Running footwear, which remained by far the biggest segment, increased by 54.2 percent during the six-month period to ¥108,594 million (€837.3m-$985.3m). The category’s operating profit increased significantly by 165.5 percent to ¥26,234 million (€202.3m-$238.0m), or 24.1 percent of sales, with an improvement in the gross margin.
In the Core Performance Sports category, which covers shoes for tennis and other sports, Asics raised its sales by 44.4 percent to ¥23,428 million (€180.7m-$212.6m), and category profit jumped by 400.4 percent to ¥4,532 million (€34.9m-$41.1m), resulting in a margin of 19.3 percent.
In Sports Style, Asics’ sales rose by 36.3 percent to ¥17,127 million (€132.1m-$155.4m), leading to an even bigger jump of 839.6 percent to ¥2,967 million (€22.9m–$26.9m) in operating earnings, which were equivalent to an operating margin of 17.3 percent.
Generating a small loss against an operating profit in the year-ago period, Apparel and Equipment booked net sales of ¥16,702 million (€128.8m-$151.6m), up by 30.5 percent from a year ago. The Onitsuka Tiger brand generated 34.0 percent higher sales of ¥21,007 million (€162.0m-$190.6m).
Europe is the star
Sales and profits grew the most in Europe in the first half of 2021. In reported terms, sales went up by 55.9 percent in Europe to ¥57,833 million (€446.3m-$525.0m), driven by Performance Running, delivering an increase of about ten times in operating income to ¥9,167 million (€70.7m-$83.4m), equivalent to a margin of 15.8 percent.
In a separate press release, Asics EMEA reported a “significant” increase in operating income to €70.5 million on 44 percent higher consolidated sales in terms of euros for the first six months of this year, mentioning “unprecedented demand” for its products in the region.
In particular, e-commerce grew by 45 percent and sales in the wholesale channel went up by 52 percent year-on-year, with increases of 43 percent in Germany, 77 percent in France, 50 percent in the U.K., 116 percent in Italy and 111 percent in the Iberian Peninsula.
Noting that Covid-19 continues to present challenges around the world, Asics EMEA pointed out that it is “managing our business carefully to ensure we can deliver and provide the best experience in the future.” As previously reported, Asics EMEA recently confirmed to us that it is resorting to a more selective distribution model because of supply chain challenges.
Turning to other regions, Asics reported sales increases in yen during the first six months of 23.0 percent in Japan, 50.6 percent in North America, 51.1 percent in Greater China, 53.0 percent in Oceania, 26.6 percent in South and Southeast Asia, and 31.3 percent in other regions of the world. The company improved its operating margins in Greater China and Oceania, and it returned to a profit in Japan, North America, South/Southeast Asia and other regions.
The company is now budgeting a 20.1 percent sales increase to ¥395 billion (€3.9bn-$3.6bn) for the full financial year. Operating and net income are seen reaching ¥13.5 billion (€100m-$120m) and ¥2.5 billion (€19m-$23m), respectively. Its previous forecast called for sales of ¥395 billion, operating profit of ¥11.5 billion and net profit of ¥2.0 billion.