Significant recoveries in China, Southeast and South Asia and its home market of Japan were big contributors to Asics Corp.’s largest Q1 sales quarter ever as the company generated a 120 percent increase in operating income to ¥22,120 million (€161.5m) for the period ended March 31. Net profit attributable to the parent rose by 87 percent to ¥16,310 million (€117.4m) as total revenues increased by 45 percent to ¥152,297 million (€1.11bn). E-commerce sales increased by 45 percent to ¥22.2 billion (€155.4m) due partly to the expansion of the brand’s OneAsics loyalty program, which grew its membership by nearly 35 percent year-over-year to 22.2 million people. Gross margin rose 30 basis points to 50.2 percent despite some currency impact on inventory purchases.
| Asics - Income | |||
|---|---|---|---|
| Q1 (￥ million) | |||
| 2023 | 2022 | Change | |
| Net sales | 152,297 | 105,329 | 44.6% |
| Cost of sales | 75,873 | 52,727 | 43.9% |
| Gross profit | 76,424 | 52,601 | 45.3% |
| SG&A expenses | 54,303 | 42,543 | 27.6% |
| Operating income | 22,120 | 10,057 | 119.9% |
| Other income | -514 | 885 | – |
| Pre-tax | 21,605 | 10,943 | 97.4% |
| Tax | 5,189 | 2,234 | 132.3% |
| Net | 16,416 | 8,708 | 88.5% |
| Source: Asics | |||
Consolidated Q1 net sales improved by double-digits in five of six geographic regions, with North America being the lone exception. With the results, the group maintained its FY23 outlook that calls for ¥510,000 million in revenues (€3.72b), an 8.8 percent increase in annual operating income to ¥37,000 million (€270.1m), and an annual net profit target of ¥20,000 million (¥146.0m).
Segment results
Performance running produced a 33 percent year-over-year sales increase to ¥77,913 million (€545.4m) and generated a 27 percent improvement in operating income to ¥16,913 million (€118.4m) as the impact of production issues from Q1/22 were eliminated. Sales rose by double-digits in major geographic regions. Segment gross margin increased by 80 basis points to 47.8 percent, helped by the normalization of logistics costs.
Core performance sports sales grew by 122 percent year-over-year to ¥22,741 million (€159.2 million as category operating profit soared 275 percent to ¥5,779 million (€40.5m) as sales in major geographic regions doubled.
Sports Style’s operating profit jumped by 180 percent to ¥3,760 million (€26.3m) on a 91 percent sales increase to ¥15,487 million (€108.4m) with revenues in Europe (+124%), Oceania (+87%), and Greater China (74%) each increasing significantly. Intends to conduct a pop-up event during Paris Fashion Week in June.
Onitsuka Tiger, boosted by a recovery trend in Japan and major growth in Southeast and Southern Asia, produced a 63 percent increase in operating income to ¥3,026 million (€21.2m) on 39 percent revenue growth to ¥12,124 million (€84.9m).
The Apparel/Equipment segment operating income rose by 243 percent to ¥601 million (€4.2m) on a 10 percent sales improvement to ¥9,605 million (€67.2m), driven by strong sales in Japan, Southeast and South Asia.
| Asics | |||
|---|---|---|---|
| 2023 | 2022 | Change | |
| Net sales (￥ million) | |||
| Performance Running | 77,913 | 58,779 | 32.6% |
| Core Performance Sports | 22,741 | 10,223 | 122.4% |
| Sports Style | 15,487 | 8,117 | 90.8% |
| Apparel and Equipment | 9,605 | 8,733 | 10.0% |
| Onitsuka Tiger | 12,124 | 8,735 | 38.8% |
| Category profit (￥ million) | |||
| Performance Running | 16,913 | 13,285 | 27.3% |
| Core Performance Sports | 5,779 | 1,540 | 275.3% |
| Sports Style | 3,760 | 1,345 | 175.0% |
| Apparel and Equipment | 601 | 175 | 243.4% |
| Onitsuka Tiger | 3,026 | 1,852 | 63.4% |
| Source: Asics | |||
Key regional performance
Europe operating profit increased by 62 percent to ¥6,551.1 million (€47.8m) on a 44 percent revenue expansion to ¥44,445 million (€324.4m).
North America, where the group saw a 550-basis-point improvement in gross margin to 42.4 percent and is continuing to reduce its number of entry price-point models (under $80) in performance running to 30 percent, the region reported a Q1 operating loss of ¥346 million (€2.5m) despite 24 percent revenue growth to ¥26,154 million (€190.9m). Part of the company’s turnaround plan for the region involves potentially closing unprofitable stores in its 91-door portfolio to lower fixed costs and strengthening the brand’s focus on e-commerce and the run specialty channel.
In Greater China, operating income improved by 25 percent to ¥4,508 million (€32.9m) on a 41 percent sales increase to ¥19,168 million (€139.9m).
In Southeast and South Asia, operating income rose by 176 percent year-over-year to ¥1,738 million (€12.7m) on 91 percent revenue growth to ¥6,958 million (€50.8m).
In Japan, segment income was 226 percent higher year-over-year at ¥4,721 million (€34.5m) as total revenues expanded by 35 percent to ¥36,356 million (€265.4m).
