Mizuno Corp. saw its sales dip by 1.6 percent to 134.3 billion yen (€1.0bn-$1.2bn) for the nine months to the end of December, but it continued to deploy a more profit-driven strategy that helped to raise its profit for the period.
The Japanese company explained that the dip in sales was due to declines in the basketball and golf markets, as well as its strategy to focus on its profitable business. Activities focusing on competitive sports and sports facility services delivered continued growth.
The strategy was described as the cause for the decline in sales in the Americas, down from ¥18.4 billion to ¥16.6 billion (€124.5m-$152.5m). Mizuno's turnover declined slightly in Europe, the Middle East and Africa (EMEA), down from ¥11.2 billion to ¥10.8 billion (€81.0m-$99.2m). Another small decline was recorded in Japan, where Mizuno's sales contracted by ¥0.6 billion to ¥91.0 billion (€682.4m-$836.2m). The only region where Mizuno managed an increase is Asia-Oceania, where its sales amplified by ¥0.5 billion to ¥15.8 billion (€118.5m-$145.2m).
The Japanese brand's sales decline was clearly caused by footwear, which generated sales of ¥40.0 billion (€3000.0m-$367.5m) for the nine months, down from ¥43.7 billion. Apparel was down slightly, off by ¥0.5 billion to ¥40.5 billion (€303.7m-$372.1m), but Mizuno's turnover relating to equipment moved up by ¥0.7 billion to ¥31.5 billion (€236.2m-$289.4m), and services accounted for sales of ¥22.3 billion (€167.2m-$204.9m), up from ¥20.9 billion.
Mizuno raised its gross profit margin by 2.9 percentage points to 40.9 percent, due to lower purchasing costs as well as the removal of obsolete inventories in the Americas. Aided by cuts in expenses, the company reported an operating profit margin of 3.8 percent for the period, compared with a negative margin of 0.2 percent. It ended with net income of ¥3.3 billion (€24.7m-$30.3m) for the nine months, while it had just about broken even with profit of ¥0.1 billion for the same period last year.