Mizuno Corp. reported net earnings rose 23.5 percent in the fiscal first quarter ended June 30 as sales advanced 12.6 percent, with both sales and profits reaching quarterly highs. Sales in the Americas climbed 15.8 percent, with gains led by golf, while the running and baseball categories also saw gains.

The Japanese-based firm maintained its outlook for the year.

Sales in the quarter reached ¥71,505 million ($450mm), up from ¥63,528 million a year ago. Net profit totaled ¥6,028 million against ¥4,880 million a year ago. Operating profits rose 33.1 percent to ¥8,360 million. Ordinary profit climbed 28.2 percent to ¥8,671 million.

Mizuno said sales and all profitability measures reached “record highs.”

Mizuno said in a statement, “During the first quarter of the consolidated cumulative period, the Japanese economy maintained on a moderate recovery trend, supported primarily by personal consumption amid improvements in the employment and income environment. However, the outlook remained uncertain due to factors such as rising geopolitical risks, particularly in the Middle East, and developments in the trade policies of various countries. As for overseas economies, although generally firm movements were observed overall, they continued to progress under uncertain conditions.

“Under these circumstances, sales of Football and Golf remained strong. In addition, sales of Sportstyle shoes and Work business products, which apply expertise gained through sporting goods development, continued to perform well. Overseas, sales of Golf, Running and Sportstyle shoes also continued to grow.”

Performance by Region

Japan
In its home country of Japan, sales moved up 7.6 percent YoY to ¥37,386 million, and operating profit gained 34.6 percent to ¥1,054 million, both reaching record highs. Mizuno stated, “In Japan, sales of Football and Golf remained strong. In addition, sales of Sportstyle shoes and Work business products, which apply expertise gained through sporting goods development, continued to perform well. In Golf, the new golf club “JPX ONE”, which applies expertise gained through Baseball bat development, was well received. In the Work business as well, the business expanded steadily, with Business-to-Business(B2B) customer increasing further. Furthermore, Sportstyle shoes applying the functions of Running shoes grew steadily in the direct sales channel, which also boosted the gross profit margin.”

Europe
European sales climbed 24.0 percent YoY to ¥9,877 million, and operating profit jumped 167.7 percent YoY to ¥1,040 million. Mizuno reported, “Europe saw strong performance in the core businesses of Running and Golf, and sales of Sportstyle shoes also increased.”

Americas
In the Americas, net sales increased 15.8 percent year-over-year (YOY) to ¥13,749 million, and operating profit advanced 8.4 percent to ¥1,851 million, both reaching record highs. Mizuno said, “In the Americas, sales increased as Golf, the core business, continued to perform strongly. In addition to the high regard for products centered on forged irons, the Company has also earned strong trust from users through its custom fitting services. Baseball and Running also recorded increases in revenue, and profits increased despite rising costs such as tariffs.”

Mizuno also said indoor category sales declined in the Americas “due to intensifying competition.” The U.S. tariffs’ impact on earnings was ¥0.6 billion.

Among categories in the Americas, golf sales grew to ¥6.9 billion from ¥5.6 billion, baseball sales increased to ¥3.7 billion from ¥3.5 billion, running sales expanded to ¥1.6 billion from ¥1.3 billion, and indoor sales declined to ¥0.7 billion from ¥0.9 billion.

Asia and Oceania
In the Asia and Oceania region, sales reached a record high of ¥10,492 million, an increase of 1,546 million (up 17.3 percent YoY), and operating profit was ¥1,087 million, a decrease 1.2 percent YoY. Mizuno said, “In Asia and Oceania, sales of Running, Football, Indoor, and Sportstyle shoes increased. On the other hand, Golf, which has a high profit margin, saw declines in sales and profit due to stagnation in the South Korean Golf market.”

Performance by Product Category

Sales by Main Categories

Overview of Financial Position for the Period
Total assets at the end of the first quarter of the fiscal year decreased by 1,177 million yen compared with the end of the previous consolidated fiscal year, to 250,294 million yen. The primary factors were an increase in cash and deposits of 2,999 million yen, offset by decreases in merchandise and finished goods of 3,413 million yen and accounts receivable- trade of 1,741 million yen.

Liabilities decreased by 6,083 million yen compared with the end of the previous consolidated fiscal year, to 71,107 million yen. The main factors were decreases of 3,018 million yen in accounts payable- other, and accrued expenses and decreases of 1,809 million yen in notes and accounts payable – trade, respectively. Net assets increased by 4,906 million yen compared with the end of the previous consolidated fiscal year, to 179,186 million yen. As a result of the above, the capital adequacy ratio increased by 2.3 points from 68.9% at the end of the previous consolidated fiscal year to 71.2%.

Outlook
For the current fiscal year, Mizuno continues to expect net sales of ¥280 billion (up 8.1 percent YoY), operating profit of ¥25.5 billion (up 12.8 percent YoY), ordinary profit of ¥26.5 billion (up 10.5 percent YoY), and profit attributable to owners of the parent of ¥19 billion (up 3.4 percent YoY).

Image courtesy Mizuno