Daiwa owner issues profit warning after weak Q1 trading

Globeride, the owner of the Daiwa fishing tackle brand, has reduced its forecast for the year after it reported a 21.1% drop in profit during the first quarter of trading.

The global group, which also owns companies within the golf, tennis and cycle outdoor sports industries, saw its ordinary profit fall to 4,581 million yen compared to the previous comparable period. Net sales were 34,116 million yen, a fall of 7.7% year-on-year.

In its report to investors, Globeride laid the blame firmly on world trading conditions. It said: “There were expectations of a recovery of economic activities in the Japanese economy following the downgrade of COVID.

“However, the continually rising commodity and energy prices has prevented us from remaining optimistic about the economic future. The overseas economy, which preceeded Japan in terms of activity following the pandemic, has also had a stagnant recovery from the impact of COVID due to inflationary trends caused by the situation in Russia and Ukraine as well as prolonged monetary policies in North America and Europe.

“Under these circumstances, the markets of the outdoor, sports and leisure industry, in which the group operates, remained weak. This is due to the financial pressure on households from soaring commodity prices as well as the increased popularity of travelling, shopping and a variety of other sports and leisure activities that had been restricted.”

In Japan, Globeride’s net sales were 23,050 million yen, down 7.8% on the previous comparable period. Segment profit was also down, 23.2% to 3,061 million yen due to an increase in import purchasing costs as a result of the depreciation of the yen.

The US market also took a large hit with profit down by 60.4% on sales of 81 million yen. Net sales in Europe were down 9.4% to 4,181 million yen, resulting in a 52.7% drop in profit.

Globeride said that the Asia and Oceania market, which had remained resilient, showed signs of a slowdown. Sales were 11,588 million yen – down 3.1%.