Nov 7, 2016
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Asics hurt by strong yen but running shoes and Tiger brand are strong

Nov 7, 2016

Sports footwear and apparel company Asics saw lower sales in Q3 to September 30 with a 7.2% drop to ¥312.52bn (£2.4bn/$2.9bn) from ¥336.81bn. And operating profit was down to ¥29.51bn from ¥33.07bn a year ago, hurt by exchange rate effects as the yen strengthened.

DynaFlyte boosted the running category for Asics in Q3 - Asics

But its net profit rose to ¥18.68bn from ¥15.2bn as a one-off charge in the year-ago period was not repeated.

In Q3, Japanese net sales fell 0.1% to ¥80.206bn, mainly due to lower interest in
sportswear and equipment, despite strong sales of its running shoes and of its Onitsuka Tiger and Asics Tiger offer.

Overseas sales fell an even worse 9.4% to ¥232.314bn on US weakness and the effects of the strong yen, again despite healthy sales of running shoes, which performed well in much of the Asia-Pacific region. The running category also saw steady sales in Europe and Asics Tiger shoes performed well in the European region too.

Yet currency exchange proved to be a major drag on sales in the quarter as the regional headline figures show. Sales in the Americas fell 19.2% as reported but only 11.3% currency-neutral. European sales fell 6.6% but rose 3.7% currency-neutral and Oceania/Southeast and South Asian regions sales rose 10.7%, but that would have been 24.9% without the fluctuating yen. Meanwhile, the 5.2% rise in the East Asian region would have been 20.5% currency-neutral.

But despite these issues, the company is understandably upbeat on its running category and its Tiger brands and has been working on new initiatives to boost them further. It has revamped the Tiger logo and opened its first Onitsuka Tiger retail store in Osaka. It also opened Asics flagships in South Korea and Shanghai.

And the company launched the DynaFlyte shoe, its first outing for its self-developed ultra-light FlyteFoam material. Asics plans to launch more shoes based on the material next year.

The quarter also saw the launch of the new Global Digital Division based in Boston that aims to accelerate its innovation in digital technology. It is managed by FitnessKeeper founder and CEO Jason Jacobs following Asics’ acquisition of his company earlier this year.

1 Japanese YEN = 0.0096 US dollars; .0077 GB pounds.

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