Mizuno reported record profits for the nine months ended Dec. 31, as sales growth continued to be underpinned by the strong performance of its golf and running products, particularly in EMEA and the Americas. However, the growth stopped in the third quarter, which showed a drop in sales of 2 percent to 38.8 billion yen (€290m-$330m), as increases of 15 percent in the Americas and 32 percent in Europe were offset by declines of 8 percent in Japan and 12 percent elsewhere, due mainly to anti-Covid measures in Japan as well as Australia, Taiwan and Southeast Asia.
By category, footwear and apparel fell by 1 percent and 18 percent, respectively, whereas equipment sales improved by 17 percent. The quarterly gross margin expanded by 1.6 percentage points to 43.2 percent, helping net earnings to inch up to ¥1,814 million (€13.7m-$15.7m) from 1,812 million in the earlier-year quarter. The company lowered its revenue guidance for the full year, predicting sales of ¥173 billion (€1.30bn-$1.49bn), but raised its profit forecast to ¥6.5 billion (€490m-$560m).
In the first nine months of its financial year, the company’s total revenues of ¥124.9 billion (€943.4m-$1,073.9m) were up by 17.0 percent on the year earlier. The gross margin widened to 42.4 percent from 40.4 percent. Bringing the operating margin up to 6.5 percent compared to 1.4 percent in the corresponding period a year earlier, Mizuno’s operating profit surged by 456.9 percent to ¥8.1 billion (€61.2m-$69.7m) - a record since the company began quarterly disclosures in 2008 - driven by the increase in the top line, improved gross margins and a decline in expenses. Net earnings for the April to December period jumped by 214.7 percent to ¥6.1 billion (€46.1m-$52.5m), also a record high.
Overseas sales rose to 36 percent of the total turnover, up from 32 percent in the previous year. Sales in the EMEA region increased by 39.6 percent to ¥14.1 billion (€106.5m-$121.2m), while the Americas rose by 35.0 percent to ¥18.5 billion (€139.7m-$159.1m). In Mizuno’s home Japanese market, revenues rose by just 9.5 percent to ¥79.5 billion (€600.3m-$683.5m). In the rest of Asia and Oceania, they went up by 22.3 percent to ¥12.6 billion (€95.2m-$108.3m).
By product category, footwear sales climbed by 20.2 percent to ¥35.1 billion (€265.1m-$301.8m) during the nine months. Sales of equipment grew by a higher rate of 37.9 percent to ¥34.2 billion (€258.2m-$294.1m). Apparel inched up to ¥35.5 billion (€268.0m-$305.3m) from ¥34.7 billion, and revenues from services and other product sales increased to ¥20.1 billion (€151.7m-$172.9m) from ¥18.1 billion.