Sluggish sales of sporting goods in Japan weighed on Mizuno’s sales for the first half of its fiscal year through September. They fell by 1.7 percent from the year-ago period to 85.5 billion yen (€708.8m-$784.2m), but they recorded increases in constant currencies in North America, the EMEA region and Australia, where Mizuno’s golf equipment and running shoes performed well.
The Japanese company’s gross margin slipped by 0.3 percentage points to 41.7 percent, but its operating profit surged by 19.7 percent to ¥4.2 billion (€34.8m-$38.5m), thanks to lower expenses in Americas and China, where it recently implemented some restructuring measures. Net income jumped by 21.7 percent to ¥2.9 billion (€24.0m-$26.6m), due to the higher operating profit and an extraordinary gain from a reformed retirement benefit plan.
In Japan, the company’s sales were down by 3.1 percent to ¥58.6 billion (€241.4m-$537.5m), with weak sales in sporting goods, which were attributed to the shrinking domestic market. However, revenues from sports facilities and services were strong.
In the EMEA region, the group saw some improvements in running and golf. Although sales grew in constant currencies, they declined in reported terms by 1.3 percent to ¥7.8 billion (€64.6m-$71.5m) due to the weakness of the British pound and the euro.
In the Americas, Mizuno’s revenues jumped by 11.8 percent to ¥10.4 billion (€86.2m-$95.4m), boosted here also by a strong performance in golf equipment and running shoes. In Asia/Oceania, sales fell by 6.4 percent to ¥8.7 billion (€72.1m-$79.8m), as the company’s own retail business was converted to a licensing model. The company noted a steady performance in Taiwan, Singapore and South Korea.
In terms of products, footwear sales were down by 2.4 percent in reported terms to ¥24.7 billion (€204.8m-$226.5m), and apparel by 5.0 percent to ¥25.0 million (€207.5m-$229.3m). However, equipment progressed by 0.5 percent to ¥20.3 billion (€168.3m-$186.2m) and the Service/Other segment rose by 1.3 percent to ¥15.4 billion (€127.7m-$141.2m).
Looking at the remainder of the year, the management aims to reach a wider range of customers in Japan by developing non-performance products like lifestyle footwear and exploring new distribution channels. In particular, it will be looking to expand the business related to its carbon technology.
In Europe, it will be seeking to reduce fixed costs and enhance operational efficiency. It believes that indoor sports products and teamwear are set to become growth drivers in the region after golf and running.
