Daiwa owner says stagnating world economies are harming sales

Globeride – the owner of fishing tackle giant Daiwa – endured another tough quarter for its sports brands in the third quarter of the financial year.

The group, which also owns golf, tennis and cycle brands, saw its profits decrease by 23.4% compared to the same period last year alongside a 2.3% fall in group sales to 94,261m yen.

This was despite a gradual recovery trend in the Japanese economy against a backdrop of the normalisation of economic activity, improvements in the employment and income environment and the expansion of inbound demand. It added: “However, the future remains uncertain due to the unstable exchange rate fluctuations, high raw material and energy prices and stagnant consumer sentiment due to rising prices.

“Overseas, although personal spending is recovering, mainly in Europe and the United States, geopolitical risks, such as the situation in Ukraine and the Middle East, high interest rates in Europe and the US and the stagnation of the Chinese economy, the overall economic recovery has not yet been achieved.

“As people have diversified into other sports and leisure activities such as going out and shopping, the result of the increased burden on household finances due to rising prices, the situation has become stagnant.”

In the Japanese region, Globeride described the outdoor sports and leisure market as remaining sluggish due to the diversification of consumption into other leisure activities such as travel and the impact of rising energy and commodity prices on household disposable income.

“In this environment our group introduced new products and services including the CERTATE spinning reel and EMERALDAS AIR saltwater lure rod for the fishing market.” However, segment profit was 4,143m yen – down 16.9%.

Despite a settling down of inventory adjustments, it reported a slow market recovery in the Americas due to high interest rates. “We have made efforts to expand sales, mainly of bass fishing products like the TATULA series,” it said. Revenue was 10,911m yen – an increase of 7.7%. Segment profit was 86m yen, a decrease of 68.4%.

In Europe, Globeride said interest rates remained high in each country and the pace of recovery in consumer behaviour was generally slow in a market that is still lacking strength. However, through the introduction of products designed to meet the needs of each region – and as a result of the weak yen – sales increased 9% year-on-year to 12,400m yen and segment profit increased an enormous 175.8% to 554m yen.

Globeride said that in Asia and Oceania, the socio-economic situation varied in each country, but generally the economy is sluggish and personal consumption weak. “In this environment, our group has been working hard to expand sales, mainly of high-end Japanese products and locally-exclusive items, but sales were 0.8% down to 37,065m yen. Segment profit increased 18% to 4,248m yen.”