Asics Reports Record First Quarter as Asia Rebounds
Asics hit a new milestone in the first quarter of 2023 – reporting its highest-ever quarterly sales on record as business in Asia rebounds after multiple COVID lockdowns.
According to the Japanese athletic brand, net sales in the first quarter increased 44.6 percent to 152.2 billion yen ($1.13 billion based on current exchange rate) compared to 105.3 billion yen ($780 million) the same time last year.
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By category, net sales at Asics’ performance running division increased 32.6 percent to 77.9 billion yen ($580 million) due to strong sales in all regions. The company’s core performance sports category saw net sales jump 122.4 percent to 22.7 billion yen ($170 million), while net sales in sports style rose 90.8 percent to 15.4 billion yen ($110 million). Apparel and equipment sales increased 10 percent to 9.6 billion yen ($71 million) in Q1 and the company’s Onitsuka Tiger brand reported net sales increase of 38.8 percent to 12.1 billion yen ($90 million).
By region, Asics Japan saw net sales increase 61.9 percent to 23.1 billion yen ($170 million) in Q1, Greater China saw a net sales rose 41.2 percent increase to 19.1 billion yen ($140 million) and net sales in the Southeast and South Asia regions – one of the company’s future growth drivers – jumped by 91.1 percent to 6.9 billion yen ($51 million).
As for North America, Asics saw net sales grow 23.9 percent to 26.1 billion yen ($190 million) due to the strong sales of the performance running category and core performance sports category.
In a statement the company noted that it “needs to improve profitability in its retail channel” in North America and will revise its store strategy mainly for owned retail stores and aging facilities as well as strengthen its focus on e-commerce and running specialty stores in wholesale. As for its product strategy in the region, Asics said it will continue to reduce the share of entry-level models in the performance running category to improve gross profit.
Overall though, Asics said in its earnings release that the company’s gains this quarter are due to “the normalization of social and economic activities” with the return of in-person sporting events and the ability to move more freely for the first time in several years across Asia. “Due to this circumstance, Japan is experiencing a trend of recovery in inbound demand,” Asics noted.
Indeed, Japan was one of the last countries to reopen its borders to tourist following the onset of COVID-19 in 2020. After more than two-and-a-half years, Japan reopened its borders to individual travel in October – allowing for tourist dollars to flow back into the economy.
Looking ahead, Asics said it is not adjusting its guidance for the full year despite reporting an increase in sales and operating income in the first quarter due to the threat of recession in the U.S. and Europe. For the full fiscal year 2023, Asics expects net sales to increase 5.2 percent to 510 billion yen ($3.79 billion).
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