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Asics narrows Q4 net loss, sales up 3.8 percent

By Prachi Singh

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Management

Sales at Asics in the fourth quarter increased 3.8 percent to 89.9 billion Japanese yen (0.8 billion dollars), reports the brand in a press release. The Japanese company reported an operating loss of 4.85 billion Japanese yen (0.04 billion dollars) against 4 billion Japanese yen (0.03 billion dollars) in the same period last year. The net loss shrunk to 2.8 billion Japanese yen (0.02 billion dollars) against 3.1 billion Japanese yen (0.029 billion dollars), in the same quarter last year.

For the full year, consolidated net sales increased 0.3 percent to 400.2 billion Japanese yen (3.7 billion dollars), decreasing 2 percent on a currency-neutral basis. Gross profit increased 3.8 percent to 183.3 million Japanese yen (1.7 million dollars), however net profit fell 16.7 percent to 12.97 billion Japanese yen (0.1 billion dollars) due to loss incurred on business restructuring in the European region.

Highlights of Asics’ full year results

Domestic net sales for the year decreased 0.5 percent to 101.1 billion Japanese yen (0.95 billion dollars) mainly due to weak sales in sportswear, despite steady sales of running shoes. Overseas sales increased 0.5 percent but decreased 2.6 percent currency-neutral to 299.1 billion Japanese yen (2.8 billion dollars), mainly due to weak sales in the American and European regions, despite strong sales of running shoes and Onitsuka Tiger shoes in the Oceania/Southeast and South Asian regions as well as the East Asian region.

In other regions, Asics America widened its loss in the fourth quarter but saw earnings improve in the full year. In the fourth quarter, operating loss in the America was 1.97 billion Japanese yen (0.01 billion dollars) against a loss of 858 million Japanese yen (8 million dollars) in the same period a year ago. Sales in the America declined 7.2 percent to 23.9 billion Japanese yen (0.2 billion dollars) from 25.7 billion Japanese yen (0.24 billion dollars). For the full year, sales in the American region decreased 6 percent or 7.7 percent on a currency-neutral to 106.2 billion Japanese yen (0.9 billion dollars), due to weak sales in the US.

Sales in Japan decreased 0.4 percent to 119.46 billion Japanese yen (1.12 billion dollars), due to poor sales in the sportswear segment. Segment income decreased 6.3 percent to 5.89 billion Japanese yen (0.05 billion dollars). In the European region, sales decreased 1.2 percent or 5.4 percent on a currency-neutral basis to 106.3 billion Japanese yen (0.9 billion dollars). In the Oceania/Southeast and South Asian regions, sales increased 15.1 percent or 9.5 percent on a currency-neutral basis to 27.7 million Japanese yen (0.27 million dollars), due to the strong sales of running shoes and Onitsuka Tiger shoes.

In the East Asian region, sales increased 13 percent or 10.4 percent on a currency-neutral basis to 49.1 billion Japanese yen (0.46 billion dollars), due to the continuing strong sales of running shoes and Onitsuka Tiger shoes in China, despite lower sales in South Korea due to restructuring current retail stores.

Asics predicts 6.2 percent sales growth for FY18

For 2018, Asics expects sales to improve 6.2 percent to 425 billion Japanese yen (3.9 billion dollars) and operating income is expected to reach 20 billion Japanese yen (0.18 billion dollars), up 2.2 percent and net profit, 12 billion Japanese yen (0.1 billion dollars).

Aiming for global growth, Asics had launched a five-year strategic plan, ‘Asics Growth Plan (AGP) 2020’, as its management target since launch in 2015, and has been aiming to achieve 750 billion Japanese yen (7.05 billion dollars) in sales, 10 percent in operating income ratio and 15 percent in ROE by FY2020. However, the company said, mainly due to changes in the consumer trend and sales channels, sales has stayed around 400 billion Japanese yen (3.7 billion dollars) till 2017, so the company has decided to revise its plan, in order to put Asics back on its further growth path, through the priority allocation of its resources to growth areas and the improvement of profitability.

Picture:Facebook/Asics

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