Asics lifts FY outlook again as 9-month grows by 73%

Asics Corp. has raised its annual outlook three months after suggesting its financial year sales will likely reach a record high. The Japanese group is now forecasting annual revenues at ¥570.0 billion (€3.53bn), up 3.6 percent from an early August estimate, and FY operating profit of ¥52.0 billion (€321.8m), up 13 percent from the previous guidance.

Nine-month and implied Q3 results are strong 

For the nine months ended Sep. 30, Asics, which recently announced top senior management changes in the U.S. and Japan, posted 55 percent operating income growth to ¥55.8 billion (€345.4m) and 23 percent revenue expansion to ¥448.1 billion (€2.78bn). Profit attributable to shareholders rose 73 percent year-over-year to ¥40.3 billion (€249.3m). Gross margin increased by 120 basis points to 51.2 percent due to higher average selling prices and an improved sales mix.

Implied third quarter results for the three months ended Sep. 30 showed 31 percent operating income growth to ¥22.2 billion (€137.4m) and a 60 percent increase in net income to ¥15.5 billion (€95.8m). Implied Q3 revenues grew by 15 percent to ¥158.0 billion (€978.0m).

Asia, performance running are solid contributors

Double-digit sales increases in Japan, Greater China and Southeast and South Asia contributed to the performance running segment’s 15.1 percent sales growth to ¥227.0 billion (€1.4bn) and 1.5 percent increase in segment profitability to ¥44.6 billion (€275.8m). Meanwhile, sales of core performance sports rose by 48.9 percent to ¥61.0 billion (€377.5m) and were driven by tennis and work shoes. Tennis footwear sales bounced up by 52.7 percent year-over-year to ¥20.0 billion (€123.8m) as category profitability lifted 57.3 percent to ¥13.0 billion (€80.5m).

Elsewhere, gains in Japan and Southeast and South Asia contributed to 40.8 percent growth for the Onitsuka Tiger segment over the nine months to ¥44.8 billion (€277.2m), generating a 101.5 percent improvement in category profit to ¥12.9 billion (€79.9m). Sportstyle segment profit was up 94.1 percent to ¥10.4 billion (€64.2m) on 46.2 percent sales growth to ¥46.0 billion (€284.4m). Strong sales in the Greater China and Oceania regions helped the Apparel and Equipment return to profitability at ¥2.0 billion on a 5.2 percent sales growth to ¥28.0 billion (€173.4m).

Nine-month results by region 

All regions had double-digit percentage increases in sales, led by a 54.3 percent gain in Southeast and South Asia to ¥21.5 billion (€132.7m) and a 76.9 percent increase in operating income to ¥4.8 million (€29.8m).

In Europe, net sales were 19.3 percent higher at ¥122.2 billion (€756.3m) on a 21.6 percent segment income improvement to ¥15.3 billion (€94.5m). In North America, strong performance running and core performance sports category growth led to a 16.1 percent sales gain to ¥87.8 billion (€543.4m) for the nine months as the region’s profitability jumped by 33.0 percent to ¥1.9 million (€11.8m). In Greater China, segment income expanded by 22.0 percent to ¥13.0 billion (€80.6m) on sales growth of 28.8 percent to ¥61.4 billion (€379.9m).