Unfavorable exchange rates and weak sales in the Americas region have led Mizuno to cut its outlook for its fiscal year ending next March 31. Impacted by the effect of weak currencies in Asia, Europe and the Americas, the company's revenues for the nine months ended Dec. 31 fell by 5.0 percent to 136,400 million yen (€1.1bn-$1.2bn). On a currency-neutral basis, they inched down by 1.0 percent.
The Japan-based company also blamed this poor performance on a shrinking golf market, along with the deterioration of the U.S. sporting goods market due to the bankruptcy of major retailers. In addition, Mizuno complained about oversupply and intense competition in the running market in America. These factors - along with the weakness of the Brazilian real and Brazil's sluggish economy - caused revenues in the Americas region to tumble by 24.7 percent from the year-ago period, or by 17.0 percent on a currency-neutral basis.
Sales in Japan - which accounted for 67.1 percent of all revenues - grew by 1.6 percent, driven by baseball and competitive sports items. Sales in Europe, the Middle East and Africa (EMEA) decreased by 6.0 percent in yen but jumped by 10.7 percent when ignoring the effects of currency fluctuations, boosted by strong sales of running and indoor shoes. Mizuno noted that the weak British pound triggered by Brexit caused a non-operating exchange loss of ¥600 million (€5.0m-$5.3m).
In Asia and Oceania, Mizuno's sales dipped by 11.3 percent but inched up by 0.7 percent in constant currencies. Sales of running products grew steadily while those of football boots continued to be brisk. Revenues were impacted by a ¥400 million (€3.3m-$3.5m) charge to cover restructuring expenses for the company's golf business in China.
On a global basis, the company's sales of footwear were down by 7.3 percent. Apparel sales dipped by 3.5 percent and equipment sales dropped by 11.2 percent, while revenues from Other/Services increased by 8.5 percent.
The company's gross margin declined by 1.4 percentage points to 38.0 percent, largely as a consequence of unfavorable exchange rates. Mizuno's net profit fell by 94.6 percent to ¥121 million (€1.0m-$1.1m).
Looking ahead, the group now expects sales of ¥187,000 million (€1.5bn-$1.6bn) for the full financial year ending March 31, 2017, with break-even earnings. Previously, the management had predicted that Mizuno's revenues would have reached a higher level of ¥193 billion (€1.6bn-$1.7bn) and net income, ¥2.2 billion (€18.3m-$19.4m).
