Reporting on its financial performance for the second quarter of 2012, Mizuno has noted that its run business division delivered strong gains and supported the company overall.
Running shoes for intermediate and advanced runners drove the overall footwear business. Sales of footwear and apparel products for soccer and volleyball among others remained firm, backed by the strong showing of Mizuno’s contracted players and teams in Japan. Sales of walking shoes also remained strong, reflecting ‘growing health consciousness’. In golf, which was driven by the strong performance of Custom Fitting, profits rose significantly.
For the fiscal period from April to June 2012:
- Overall revenue totalled ¥42.6 billion, up 2.6% year on year
- Sales of the footwear business, including running shoes and apparel, remained strong. Mizuno’s golf business was ‘back on course for a recovery in Japan and the United States’ and sales increased on a currency-neutral basis, amidst a difficult market environment
- Operating profit was ¥2.7 billion, down 15.5%. Two major factors for the decline in operating profit were an increase in selling, general and administrative expenses attributable to active investments in the year of the Olympics and higher purchasing costs
- Both factors were within the scope of assumption, and ‘Mizuno minimized the fall in profit margin by expanding sales.’ In the second half, the company ‘will boost sales and take steps to improve profits’
In Europe, which Mizuno notes has ‘continued to grapple with a chain of financial crisis problems’, double-digit growth in sales on a currency-neutral basis was achieved in the UK and France ‘through efforts to boost demand for footwear and sports apparel products.’ In the Americas, overall revenue increased by 6% on a currency-neutral basis. In Japan, where consumer spending was improving, albeit modestly, sales were up 3.2%.
The run category in both Europe and North America was once again a key revenue source, with high value-added products such as Mizuno’s Wave Rider 15 running shoe performing well. The Wave Rider 15 was the company’s champion product in the ‘A Brilliant Run’ marketing campaign that ran during the spring buying season. Mizuno noted that sales increased not only in running specialty shops but also at Big Box National Sporting Goods Retailers.
With Japanese sports and exercise equipment manufacturer Senoh Corporation being made a wholly owned subsidiary in June 2012, Mizuno has revised its forecast for fiscal 2012. The original forecast of revenue of ¥160 billion and net income of ¥3.6 billion has been revised to revenue of ¥167 billion and net income of ¥3.8 billion.