Descente, the Japanese sportswear group, posted revenues for the financial year ended March 31 of 96,862 million yen (€727.2m-$887.8m), down by 22.2 percent on the year earlier, due to the cancellations of events and competitions, plus the closure of retail stores due to the Covid-19 pandemic. The decline in its top line softened in the fourth quarter, and the management has upgraded its outlook for the current financial year.
In the fourth quarter, the group recorded a 5 percent drop in its revenues to ¥30.2 billion (€230m-$285m), with sales increases in Japan for the Descente brand as well as Le Coq Sportif. Among the bright spots for the full year, its distribution of Umbro products in South Korea grew by 120 percent and the Descente brand enjoyed a sales increase of 165 percent in China. Online sales in China went up for Descente, Le Coq Sportif and Munsingwear.
The company reported an operating loss of ¥1,806 million (€13.6m-$16.6m) for the year, as compared to a profit of ¥379 million the year earlier. It reported a net profit of ¥5,309 million (€39.9m-$48.8m) compared with a loss of ¥2,481 million, thanks to a one-off gain of ¥6,419 million (€48.3m-$58.9m) tied to a reorganization of its China business in the third quarter. It made a small profit of ¥211 million (€1.6m-$2.0m) in the fourth quarter against a loss of ¥4,251 million in the same period a year ago.
Sales of athletic wear fell by 24 percent to ¥60,433 million (€454.4m-$555.0m), while sales of golfwear and related products were off by 15 percent to ¥28,412 million (€213.6m-$260.9m). The company promoted the sale of Descente branded running shoes in both Japan and South Korea, and used the learnings to develop a golf shoe. Outdoor clothing and related products generated revenues of ¥8,016 million (€60.3m-$73.6m), down by 31.1 percent on the year.
Sales in Descente’s home Japanese market fell by 18.1 percent to ¥47,079 million (€354.0m-$432.3m), although the company’s own e-commerce sales went up by 68 percent. In Japan, Descente has focused on allocating management resources to directly-managed stores and e-commerce, and said it has established a system to ensure stable revenues in the country from the fiscal year ending March 2022 onwards. Sales in South Korea declined by 22.3 percent to ¥46,156 million (€347.1m-$423.8m). Following the reorganization in China, the revenues from the company’s local joint venture with Anta Sports Products grew by about 67 percent, with a doubling in the online business.
Brandwise, the group’s total annual sales fell by 20 percent for the Descente brand to ¥41.5 billion, by 21 percent for Le Coq Sportif to ¥26.9 billion and by 4 percent for Umbro to ¥7.0 billion.
Descente expects to post a sales increase of about 17 percent to ¥50 billion (€376.0m-$459.2m) in the first half of its current financial year, and ¥103 billion (€747.7m-$946.0m) for the full year, up by 6 percent. The company is anticipating gains in all geographical regions and all brands, led by the Descente brand.
The company is projecting operating income of ¥450 million (€3.4m-$4.1m) for the first half and ¥3,100 million (€23.2m-$28.5m) for the full year. Net profit is anticipated to amount to ¥600 million (€4.5m-$5.5m) for the first half, but the net profit for the full year should decline to around ¥3 billion (€22.6m-$27.5m) because of the expected lack of extraordinary gains.
