Weaker sales in running shoes and other categories led to a decline in sales and profits for Mizuno for its first quarter ended June 30.
Revenues dropped by 6.9 percent from the year-ago quarter to 42.8 billion yen (€338m-$386m), weighed down by weak sales in the running category, especially in Japan, the Americas and Asia/Oceania. The company added that sales in Japan also declined because of a shrinking number of players in baseball, golf and other categories.
Mizuno's gross margin firmed up by 1.8 percentage points to 42.4 percent, as purchasing costs declined and recent restructuring measures in the Americas paid off. However, the group's operating profit fell by 11.7 percent to ¥1,400 million (€11.1m-$12.6m), as the improvement in the gross margin and the reduction in expenses were not sufficient to offset the decrease in the turnover. Net income dropped by 17.1 percent to ¥800 million (€6.3m-$7.2m).
In the footwear category, Mizuno's sales were down by 5.4 percent to ¥12.3 billion (€97.3m-$110.8m), while apparel sales declined by 7.6 percent to ¥13.3 billion (€105.2m-$119.8) and equipment sales dropped by 12.1 percent to ¥10.2 billion (€80.7m-$91.9m). The Service/Others category inched down by 1.4 percent to ¥6,900 million (€54.6m-$62.2m).
By region, Mizuno's sales were down by 4.0 percent to ¥29.1 billion (€230.1m-$262.2m) in Japan and by 13.0 percent to ¥4.7 billion (€37.2m-$42.3m) in Asia/Oceania. Last year's efforts to cut out lower-margin sales in the Americas reduced the regional turnover by 23.9 percent to ¥5.1 billion (€40.3m-$46.0m). However, in Europe, the company saw sales gain 8.6 percent to ¥3.8 billion (€30.1m-$34.2m). After two years of operating losses in EMEA, the Japanese group managed to turn things around with its strategy to focus on profitable sales. It is now looking to continue to expand in the tennis and indoor footwear sectors, while strengthening its casual footwear business and securing stable profits in the golf business.