Seventy-year-old Japanese performance footwear brand Asics is making its presence felt in North America, recording solid growth in Mexico and the U.S. in Q3 for the third-straight quarter of positive growth on the continent—its first such streak since 2015.
In a Nutshell: Asics said it went into the quarter focused on four priorities: win with performance running shoes, expand its vintage brand name, Onitsuka Tiger, accelerate growth via the expansion of its HQ in Shanghai and find new business through digital channels.
As a top priority, Asics expanded its performance running bloc through a new sponsorship of the Los Angeles Marathon, beginning in 2020. Following the news that it would be the event’s primary sponsor, Asics also made waves in the running world by acquiring Race Roster, a racing registration platform that gives the brand direct access to runners at events all over the world.
“The idea of integrating an athletic brand with race registration solves many of the challenges faced by race directors,” Alex Vander Hoeven, CEO of Race Roster, said of the acquisition. “We are excited that a brand so deeply ingrained in the running community shares our vision, and we look forward to introducing our expanded offering to the racing industry.”
In October, Asics took an equity stake in innovative Spanish fabric startup Pyrates Smart Fabrics as a part of its mission to shift production to sustainable materials.
Sales: Global net sales for Asics fell 3.2 percent to 286,166 million yen ($2.635 billion) in the third quarter, which the company blamed on weak sales in its apparel and equipment category despite strong sales for Onitsuka Tiger.
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In the United States, sales were up 5.7 percent in Q3 and are now up 3 percent on the year. Increased store traffic during back-to-school and holiday shopping seasons buoyed the brand—along with 6.2 percent year-over-year growth in the performance running category.
Asics’ Core Performance Sports category also saw a healthy increase in sales, up 19.3 percent year-to-date, propelled by new tennis shoe releases.
Much of the brand’s growth in North America was also driven by its digital push, as e-commerce sales increased at a rate of 39.7 percent so far in the year. Asics credited its strategic investments in email, paid search and social channels for this growth.
Asics sales in Mexico saw the largest jump in the region, growing 98.4 percent in local currency sales and 359 percent in the wholesale channel due to a “renewed strategic approach.” Sales in Canada benefitted from this same strategy, up 359 percent in the quarter.
Earnings: Overall sales for Asics weakened in the third quarter due to higher margins and struggles in apparel and equipment. As a result, net profit fell to 7,172 million yen ($66.04 million) from 8,637 million yen ($79.53) million in the comparable time frame.
CEO’s Take: As of March, Asics North America has been operating under the tutelage of new CEO, Koichiro Kodama. His priority has been to promote the brand’s performance heritage from the start, which he said nurtured Asics’ success on the continent in Q3.
“Asics has continued to showcase our commitment to our consumers and performance running,” Kodama said. “As we close out the year, we will continue to enhance the ways in which we support and connect with consumers through our trusted partners and our direct-to-consumers.”