Mizuno struggles in third quarter
Mizuno is slowing down. After a 4.8% revenue growth in 2015-16, reaching JPY196 billion (€1.622 billion), the Japanese sporting goods group is expecting a sales shortfall in 2016-17. At the end of December, after the first nine months of the current fiscal year, Mizuno's revenue fell by 5% to JPY136 billion (€1.126 billion). The third quarter was especially troubled, with a shortfall of more than 7%, for JPY43 billion.
The group has indicated that its golf range has suffered worldwide. In all categories combined, the American market was hit by the worst decline. Like the entire industry, the group was penalised by the default of several major distributors, and by the troublesome Brazilian market.
Instead, over the first nine months of the fiscal year ending in March 2017, Mizuno's sales in local currency grew in Japan, Europe and the Asia-Pacific region. However, unfavourable exchange rates against the Japanese yen mean the group's revenue decreased everywhere except on its domestic market. Sales in Japan in fact grew from JPY90.1 billion to JPY91.6 billion, while they fell in the Americas from JPY24.4 to JPY18.4 billion, in Europe from JPY11.9 to JPY11.2 billion and in Asia-Pacific from JPY17.2 to JPY15.3 billion.
Mizuno's margins too were hit in the first nine months of the fiscal year, its gross margin falling from 56.7% to 51.8%. In particular, the group suffered some modest operational losses, while it was profitable last year. The first nine months of the fiscal ended with a neutral result, while in the same period last year its net income was JPY2.3 billion.
The group expects to return on the growth path in the 2017-18 fiscal year, notably due to the launch of a new range of athleisure shoes.
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