Brooks saw 24 percent year-over-year revenue growth in the third quarter, marketing the eighth consecutive period of growth. And Asics North America (ANA), which includes the U.S., Canada and Mexico, experienced a 16 percent sales increase over 2020 totals to $207.4 million. For a third consecutive quarter, the North America region experienced a double-digit quarterly sales increase year-over-year.
Across all global markets, which include EMEA, China and Japan, Asics saw revenue increase 11 percent to $996.3 million in the quarter on net income of $59.4 million.
Brooks’ leading footwear franchise styles led the gains as revenue from the Adrenaline GTS, Ghost and Glycerin franchises are up 50 percent versus 2020.
Asics’ performance running and core performance sports categories both saw a double digit increase in the third quarter. Performance running was driven by strong demand for the Gel-Nimbus and GT-2000 models while the core performance sports category was propelled by pinnacle and entry-level tennis products, including the Gel-Resolution, Court FF Novak, Gel-Game and Gel-Dedicate shoes.
Additionally, growth for the North American region was driven by double-digit increases from Asics’ run specialty, strategic partners and team sales channels. Further, the return of fall sports and marathon races were contributing factors in the strong third quarter.
Both companies entered the third quarter with factory shutdowns, so they shared similar widespread supply chain disruptions as their contemporaries.
These headwinds began to affect Brooks’ ability to meet consumer demand for the quarter, reducing revenue in September.
The brand, which launched the carbon neutral Ghost 14 shoe earlier in 2021, expects supply chain impacts to continue through the second quarter of 2022, but says it is well positioned to manage through the disruption with strong partnerships in its geographically diverse, yet categorically focused supply chain ecosystem.
“More than twenty years ago, we made a big bet that if we put the runner at the center of everything we do—delivering the product they need and then celebrating the many reasons they run and the positive energy they get from it—we could become a leading brand in run,” Brooks Running CEO Jim Weber said. “We look forward to welcoming more people into the running community as we close out 2021 and enter the new year.”
Earlier in November, Brooks recognized the one-year anniversary of signing the Climate Pledge and its commitment to achieve net-zero carbon emissions by 2040. In June, the company unveiled its plans to reach these specific targets.
Brooks, a subsidiary of Berkshire Hathaway Inc., doesn’t report its individual revenue or earnings numbers.
Unlike Brooks, Asics didn’t indicate how September sales played out, but the North American branch’s incoming CEO expressed confidence in the market’s success heading into the holiday. Richard Sullivan, currently the president and chief operating officer of Asics North America, will become CEO of the company, effective Jan. 1, 2022. As part of the promotion, he will also become an executive officer at parent company Asics Corp. in Japan.
“We are pleased to see the momentum from the first two quarters and now into the third. It is a testament to the diligence and hard work across our teams in North America,” Sullivan said. “Despite the challenges across our industry, our goal is to continue moving the brand forward while maintaining focus on providing superior products to our consumers and partners.”
In the U.S. adult performance running footwear category, Brooks captured 19 percent market share, based on revenues from January to September 2021, and gained 2 percentage points versus last year, according to The NPD Group Retail Tracking data.
Across the board, footwear has done well for itself in 2020. Powered largely by pent-up demand and rising average selling prices to combat rising freight and materials costs, U.S. footwear revenues grew by 28 percent, in the January through September period compared to last year, and increased by 8 percent versus 2019. By 2023, revenues are forecasted to be 16 percent ahead of pre-pandemic 2019 levels, as average prices continue to rise.
But running footwear brands like Brooks Running and Asics should continue to be major beneficiaries, even when accounting for the overall success of footwear since the start of the pandemic. The demand for running shoes in particular gave way to a recent IPO for On Running, and have led to brands such as Hoka One One and Saucony becoming the fastest-growing labels at footwear giants Deckers Brands and Wolverine Worldwide, respectively. And NPD previously indicated as early as June that performance running footwear grew by about one-third in the first half of 2021 versus the year-ago period.
“After years of continuous declines, the next two years are looking up for performance footwear,” said Matt Powell, sports industry advisor for NPD Group. “Running will be the key area here, as I expect we’ll see performance-running shoes return as streetwear. It has been nine years since these shoes were viewed as a fashion trend, and today it will require brands and retailers to rethink the cadence and content of their footwear releases.”