Slowing demand contributes to fall in Globeride revenue and profit

Slowing demand for outdoor sporting and leisure goods – including fishing tackle – and an adjustment in inventory levels were among the reasons cited by Daiwa owner Globeride for a 3.6% fall in group revenue for the first six months of the year and a 23.2% decline in year-on-year gross profit.

In its report to investors, the group described the market in which it operates as ‘stagnant’ and affected chiefly by the increased burden on households from soaring commodity prices as well as diversifying ways to spend leisure time including the increased popularity of travel, shopping and a variety of other sports and leisure activities.

The Japanese giant, owner of brands in segments that include fishing, bicycle components, golf and tennis, reported net sales across the group of 65,253 million yen and gross profit of 5,011 million yen, the latter a result of an increase in expenses such as personnel. Ordinary profit was 4,840 million yen – down 32.8% compared to the same period last year.

These figures came against a backdrop of a slight recovery in the Japanese market, following a return to normal economic activities and an improved employment and income environment alongside a rebound in inbound tourism demand. However, Globeride warned the future still remains unclear due to rises in commodity prices fueled by soaring material and energy prices, depreciation of the yen and sluggish consumer confidence. Net sales were 42,889 million yen – down 2.2% year-on-year – and segment profit was 3,268 million yen – a 19.9% drop.

Overseas, Globeride reported that while consumer spending was recovering – mainly in the US and Europe – overall the economic recovery has yet to materialise due to geographical risks such as the situations in Ukraine and the Middle East, high interest rates in countries in Europe as well as the US and economic deceleration in China.

Products that catered for local needs continued to be launched in Europe and the region suffered from the impact of conversion rates due to the weak yen. Net sales were 9,226 million yen, an increase of 12.9%, and segment profit was 721 million yen – up 68.6%.

In a bid to bolster sluggish consumer spending in Asia and Oceania, Globeride worked to expand sales mainly in high class Japanese-made products and goods made exclusively for local areas. Net sales were 23,678 million yen (down 4.9%) and segment profit was 2,613 million yen (down 24.9%).

Globeride highlighted the success of its CERTATE spinning reels in Japan and the Tatula series in the bass market across the US.