Asics raised its sales by 3.7 percent to €695 million in Europe, the Middle East and Africa (EMEA) in the nine months to September, with more focus on fewer accounts with more diverse products.
Sales of running footwear were up by 6 percent in the region, against a rise of 3 percent for apparel. They were bolstered by the launch of Dyna Flite, running shoes with Flyte Foam, a midsole that provides the brand's lightest-ever cushioning. Flyte Foam will be expanded into a new series of “fast” running shoes launching in spring 2017.
Europe generated particularly strong demand for Asics Tiger, the group's brand for the sports fashion category, with a sales increase of 54 percent for the three quarters. Asics Europe attributed the sharp rise to consistent branding around the Gel range and a large-scale global campaign about the Chameleoid Mesh Pack, consisting of shoes with multi-toned, color-changing uppers.
Directly managed retail sales were up by 16 percent in the EMEA region for the nine months. The third quarter saw the opening of a new customer experience center in Barcelona, intended to centrally manage all consumer interactions for the region.
Translated into reported revenues, the European sales increase amounted to a decline of 6.6 percent to 84,957 million yen (€706.0m-$751.5m) for the nine months, as reported by Asics Corporation. The regional operating income decreased by 0.6 percent to ?¥9,750 million (€81.0m-$86.2m) but that amounted to an increase of 10.4 percent in local currencies, with an improved gross profit margin. As previously reported, the group established a subsidiary in Dubai.
The entire Asics group's sales were down by 7.2 percent to ¥312,520 million (€2,597.2m-$2,764.3m) for the period, which was chiefly blamed on weaker sales in the Americas. The group's turnover was down by 19.2 percent to ¥87,177 million (€724.6m-$771.1m) in the region, and off by 11.3 percent in constant currencies, due to the tough situation in the retail market and intensifying competition in the U.S. The Japanese group's income in the Americas shrank by 71.5 percent to ¥1,720 million (€14.3m-$15.2m) and it was still off by 68.7 percent in constant currencies. While the group made efforts to reduce advertising and other costs, the regional income was affected by an allowance for doubtful receivables.
Japanese sales were down by 3.6 percent to ¥93,855 million (€780.5m-$830.4m) for the nine months, which was caused by a decrease in internal trading, while demand remained strong for running footwear, Onitsuka Tiger and Asics Tiger. The segment's income more than doubled to ¥7,393 million (€61.5m-$65.4m), as the company strove to reduce sales of the least profitable products and to make its organization leaner.
The Asics group's sales advanced by 10.7 percent to ¥18,309 million (€152.4m-$162.0m) in the Oceania, Southeast and South Asia region, which was a rise of 24.9 percent in constant currencies. The regional income was up by 11.6 percent to ¥3,170 million (€26.4m-$28.1m). Asics opened a subsidiary in Bangkok to support its sales in Thailand.
In East Asia, the group's Chinese subsidiary pushed up sales of running footwear and Onitsuka Tiger, among others. The regional sales rise of 5.2 percent to ¥34,118 million (€283.7m-$301.9m) amounts to a jump of 20.5 percent in constant currencies. The regional income amounted to ¥6,047 million (€50.3m-$53.5m), up by 16.4 percent in yen and by 33.9 percent in constant currencies. Asics opened a flagship store in Shanghai, selling a comprehensive lineup of Asics products.
The Other business segment, which covers the Haglöfs brand, saw its sales decrease by 15.1 percent in yen to ¥7,523 million (€62.5m-$66.5m) and by 6.0 percent in constant currencies. While its footwear sales were on the rise, the group reported weaker performance for outdoor clothing. The segment suffered a small loss of ¥157 million (€1.30m-$1.39m).
The Japanese group continued to reinforce its Asics brand in performance running with the Dyna Flite, along with sponsorship of marathons and a trail running event held around Mont Blanc. The company also sought to expand its customer target in the training category, with the launch of the FuzeX TR training shoe and events targeting active women in the U.S. and Brazil. Other investments in performance sports included an official supporter agreement sealed with the international volleyball federation.
The brand identity of Asics Tiger was updated and its color changed to make it more dynamic. The group opened its first own store for the Asics Tiger brand in Osaka, and a flagship store for Onitsuka Tiger in Korea.
On a more international scale, the group's global digital division was launched to focus on digital technologies. The division is based in Boston and led by Jason Jacobs, the founder and chief executive of RunKeeper, which was acquired by Asics earlier this year.
The operating income for the entire group was down by 10.8 percent to ¥29,506 million (€245.2m-$261.1m) and its ordinary income dipped by 2.1 percent to ¥26,792 million (€222.6m-$237.0m). Asics forecasts that its sales will decline by 6.0 percent to about ¥403,000 million (€3,348.7m-$3,566.8m) for the full year, while its operating income will slide by 16.2 percent to ¥23,000 million (€191.1m-$203.6m) and its ordinary income will dwindle by 11.2 percent to ¥20,000 million (€191.1m-$203.6m).