ASICS (7936)

Signal panel

Investment thesis

1. Growth is broad and mostly organic. H1 2026 sales were ¥534.5bn, +32.7% reported and +22.0% ex-FX. OP was ¥120.5bn, +48.5% reported and +37.7% ex-FX. Every category and every region grew (Q2 短信 p.5, p.6 (printed 4), p.7 (printed 5)). Reported fact.
2. The mix shift drives the margin. SportStyle sales rose 83.0% (+65.6% ex-FX) to ¥123.2bn with a 34.0% category margin. Onitsuka Tiger rose 35.9% to ¥89.5bn with a 39.7% margin. Together they are 40% of H1 sales and 50% of category profit (¥77.5bn of ¥154.5bn), against 44% of category profit in H1 2025 (Q2 短信 p.6, printed 4). Reported fact; profit shares are an inference from those figures.
3. FX did a lot of the work in H1, and that support is fading. H1 translation rates were USD ¥158.23 (+6.2%) and EUR ¥184.65 (+13.6%) (Q2 短信 p.18, printed 16). About 10 points of the 32.7% sales growth came from currency. Press reports put the company's full-year assumption at USD ¥160 / EUR ¥180, with EUR/JPY at 177.6 on 2026-10-02 after the BoJ raised its rate to 1.25% on 2026-09-18 (Gendai, 2026-10-14). Secondary source; the 短信 in the snapshot does not state the assumption.
4. Valuation is at the stock's own average, not cheap. The 1-year-forward consensus PER is 23.1x against a band mean of 23.5x (z −0.15). PBR is 9.4x (z −0.15). The company-forecast PER is 28.1x. Japanese peers trade at 12–18x (see Valuation). Reported fact (IFIS).
5. Capital return is the near-term floor. A buyback of up to ¥70bn (2.82% of shares) runs from 2026-09-10 to 2027-03-31, and about ¥17bn had been bought by 2026-09-30 (TipRanks, company notice summary). 25m treasury shares were cancelled on 2026-09-30. The dividend forecast was raised to ¥44 from ¥38 (Q2 短信 p.1). Reported fact, via secondary summaries for the buyback progress.

Business and earnings

ASICS sells performance running shoes, court and field sports shoes (Core Performance Sports), apparel, SportStyle (retro running silhouettes worn as fashion) and Onitsuka Tiger (a premium lifestyle brand). It sells through wholesale, its own stores and e-commerce. No customer reaches 10% of sales (有報 p.154). Manufacturing is outsourced to OEM factories in Southeast Asia and China, and most product is bought in USD (有報 p.38, p.40). Overseas sales were 80.5% of the total in FY2025.

Profit engine (H1 2026 category profit, Q2 短信 p.6): Performance Running ¥58.1bn (26.3% margin), SportStyle ¥41.9bn (34.0%), Onitsuka Tiger ¥35.6bn (39.7%), Core Performance Sports ¥13.1bn (23.8%), Apparel ¥4.3bn, Walking ¥1.5bn. Running is the base and gives credibility. The fashion-adjacent categories make the incremental profit.

Regions (H1 2026 segment profit, Q2 短信 p.7, printed 5): Europe ¥34.7bn (+43.8% ex-FX), Japan ¥28.6bn (+32.2%, inbound demand for Onitsuka Tiger), China region ¥19.8bn, North America ¥19.1bn (+74.9% ex-FX, margin up to 20.1%), SE/S Asia ¥7.6bn. Oceania profit fell 3.2% ex-FX. It is the only weak spot.

Quarterly momentum (fact sheet): Q1 2026 OP was ¥60.8bn (+36.5%) and Q2 ¥59.7bn (+63.1%). The OP margin was 22.5% and 22.6%, against 21.4% and 18.8% a year earlier. Momentum accelerated through Q2.

Below operating profit: H1 carried ¥6.7bn of 転身支援等費用 (career-transition support costs, a one-off special loss) and ¥3.1bn of fixed-asset sale gains. Overseas business losses in non-operating expenses rose to ¥2.5bn from ¥0.9bn (Q2 短信 p.11, printed 9). Net of tax, the one-offs lower NP by about ¥3.5–4.5bn (inference, at a ~26% effective tax rate).

Structural change ahead: Onitsuka Tiger moves into a separate subsidiary, OT GROUP, on 2027-01-01 and re-enters the US in 2027 (Q2 短信 p.4, printed 2). It stays consolidated. The change is organisational, but it may come with new disclosure of the brand's standalone economics.

Forecast test

Guidance (company, revised 2026-08-14): sales ¥1,050bn, OP ¥195bn, RP ¥189bn, NP ¥120bn, EPS ¥169.30. The initial guide on 2026-02-13 was ¥950bn / ¥171bn / ¥110bn. Consensus (IFIS, 2026-10-16): sales ¥1,046bn, OP ¥200.4bn (range ¥195–205bn), NP ¥127.9bn. Consensus OP rose 10.1% over 3 months. FY2027 consensus is OP ¥226.7bn and NP ¥150.1bn.

What H2 needs (inference from the guide minus H1):

The margin guide is conservative: it assumes H2 OPM falls after an H1 rise of 2.4 points. The sales guide is not. FY2025 average rates were USD ¥150.32 and EUR ¥169.09 (FY 短信 p.30), so the H2 2025 euro rate was roughly ¥175 (inference). At about ¥178 now, H2 sales get only about 2–3 points of FX help, so ex-FX growth must stay around 23–24%, slightly above H1's 22.0%.

Seasonal progress: H1 OP of ¥120.5bn is 61.8% of guidance. The median at H1 across the previous four years is 66.5% on guidance in force at the time, and 57.9% on final actuals. Against the actual seasonal shape, progress is 3.9 points ahead, which on its own points to OP of about ¥208bn. Q4 is structurally weak (Q4 2025 OP was ¥14.9bn at an 8.0% margin), so the Q3 print decides it.

Track record: Actual OP beat initial guidance in each of 2021–2025, by 213%, 48%, 47%, 73% and 19%. It beat the final revised guide by 0.0–4.3% in 2023–2025. The beat is habitual and therefore expected, and consensus is already 2.8% above.

Revision probability: Medium. A modest OP beat (¥198–205bn) is likely if EUR/JPY holds near 175–180. A further sales raise is unlikely. A second formal raise at Q3 would need ex-FX growth to hold above 20%.

Restated EPS: Without the H1 transition costs and asset gains, NP guidance would be about ¥124bn, or EPS about ¥175. The company-forecast PER becomes 27.1x instead of 28.1x.

Financial strength and capital allocation

• Balance sheet: Net cash of ¥13.7bn at FY2025. Cash was ¥141.4bn at 2026-06-30. The equity ratio rose to 52.8% from 46.3%. The current ratio is 1.96 at H1 (¥491.7bn / ¥250.8bn) (Q2 短信 p.1, p.9). Gates pass.
• Cash conversion: OCF was positive in all of 2023–2025 (¥90.1bn, ¥104.6bn, ¥109.9bn). The only negative year, 2022 (−¥21.4bn), was an inventory build. FY2025 OCF/NP fell to 1.11. H1 2026 OCF was ¥58.8bn after a ¥43.0bn receivables build (seasonal; ¥24.5bn a year earlier) and ¥32.8bn of tax (Q2 短信 p.13, printed 11).
• Inventory (amber flag) has eased: FY2025 inventory grew 30.1% against sales growth of 19.5%. At H1 2026, merchandise fell to ¥169.9bn from ¥174.4bn while sales grew 33% (Q2 短信 p.9). The flag no longer describes the current position. Inventory days (DIO) is one of the executive pay metrics (有報 p.102).
• Capital efficiency: ROE rose from 6.9% (2021) to 39.1% (2025), ROA from 2.8% to 17.9%, and IFIS ROIC is 27.7%. The rise in ROE came from margin: the net margin rose from 2.3% to 12.2%. Asset turnover improved modestly (1.17 to 1.38), and leverage fell as the equity ratio rose. The MTP2026 target was "ROA around 15%" (revised Nov 2024). ASICS reached 17.9% in 2025, a year early (有報 p.15, p.50). Against an assumed cost of equity of 8–9% (analyst assumption), the spread is wide.
• Peers: Mizuno (8022) ROE 11.2%, Goldwin (8111) ROE 20.1% (Yahoo! Finance Japan, actuals, 2026-10-16).
• Returns: The policy is a progressive dividend plus a 50% total payout over the MTP period (FY 短信 p.11). Total payout was 85.2% in 2024 and 50.6% in 2025. For 2026, a ¥44 DPS (about ¥31bn) plus the ¥70bn buyback, which spans into 2027, gives about 84% of NP guidance. The board bought back after a 26% fall, citing a price "far from fair value" (Gendai 2026-10-14). That is opportunistic, not cosmetic, and fully covered by FCF of ¥80.5bn (2025) and net cash.
• Cross-shareholdings: All listed 政策保有株式 were sold, and the policy is to hold none (有報 p.103).
• Capex: ¥31.0bn in 2025, 1.19x depreciation, on stores, IT and software. It is light for the size of the business.

IR and management credibility

• 2023-11: MTP2026 published (original targets not checked in this review).
• 2024-11: Targets raised to OP ≥¥130bn, OPM ≥17%, ROA around 15%, because the originals were on track two years early (有報 p.50).
• 2025: The raised targets were met a year early: OP ¥142.5bn, OPM 17.6%, ROA 17.9% (有報 p.15).
• H1 2026: Walking was split out as a new disclosed category, and category profit is disclosed with FX-neutral rates (Q2 短信 p.6, printed 4).
• Pending: MTP2029 is due "around Q4 2026". Management has signalled "early achievement of ¥1tn sales" with more growth investment (有報 p.15). The risk is that heavier investment caps the margin.
• Weak spot: Initial guidance has been conservative for five years running. In May 2026 the unchanged guide (3.1% below consensus) sent the stock down about 6% (SGI Europe). The market has learned to expect the beat.
• History: 訂正有報 (2021-04-01) and 訂正短信 (2019-02-13) appear in the disclosure list. These are minor corrections, not restatements of results, but the content was not checked (unknown).

Valuation and scenarios

Share count is about 700m after the buyback (inference: ¥3.37tn market cap ÷ ¥4,750 gives about 709m, less about 11m still to be bought).

With weights of 25/50/25, the expected value is about ¥4,875, or +3% plus a 0.9% dividend yield. A consensus target of ¥6,040 (+27%) is an external estimate, not fair value.

What the price implies: ¥4,750 ÷ 23.5x means EPS of about ¥202, or 2027 NP of about ¥141bn, roughly 6% below consensus. The market is applying a moderate haircut for FX and growth deceleration, not a collapse.

Bands: PER (1-year forward consensus) is 23.1x against a mean of 23.5x, a −2σ of 18.5x and a +2σ of 28.6x. PBR is 9.4x against a mean of 9.6x. EV/EBITDA is 15.2x on the forecast.

Peers (Yahoo! Finance Japan, 2026-10-16, company-forecast PER / actual PBR): Mizuno 18.3x / 1.95x (ROE 11.2%). Goldwin 11.9x / 2.40x (ROE 20.1%; FY3/27 forecast, which may include one-offs; not checked). ASICS's premium is justified by roughly 2–3x their ROE and much faster growth, but the domestic peers are poor comparables. The relevant global peers (adidas, On, Deckers, Nike) were not pulled, and this is a limitation.

Why the market might be right to hold it here: the H1 beat was partly currency. The BoJ is tightening and the yen has firmed. Sell-side is near-unanimously bullish (9 of 10 analysts at 強気), and SportStyle at +83% is a fashion cycle that could crest.

Bull case

• Q3 shows ex-FX growth of 20% or more and an OP margin above Q3 2025's 20.9%. OP lands at ¥205bn or more, and consensus for 2027 moves toward ¥240bn.
• MTP2029 sets credible targets, for example ¥1.5tn sales and OPM of 20% or more, plus a sustained buyback policy.
• Oasis's involvement keeps pressure on capital return.
• The 2027 US re-entry of Onitsuka Tiger adds a new growth leg at a 40% category margin.

Bear case

• The yen strengthens further (USD below ¥150, EUR below ¥170). Translation alone takes 5–8% off 2027 OP (inference from the H1 sensitivity).
• SportStyle demand cools. It was +100% in Europe in H1, which is fashion-cycle growth.
• Inbound demand in Japan (the Onitsuka Tiger driver) slows with a stronger yen.
• MTP2029 front-loads investment and margin guidance disappoints. The pattern in May 2026 shows the stock punishes conservative guides.
• US tariff changes on Southeast Asian-sourced footwear (有報 p.39 lists tariffs as a value-chain risk).

Catalysts

What would change the rating

• Upgrade to Buy if the price falls below about ¥4,300 (about 20x 2027 consensus EPS, below −1σ) with no deterioration in ex-FX growth. Also upgrade if Q3 ex-FX sales growth is 20% or more with OPM expansion and consensus 2027 OP moves above ¥235bn.
• Downgrade to Sell if Q3 ex-FX growth falls below 12%, or the FY OP guide is cut, or MTP2029 guides the OP margin below 18%, while the PER stays above 25x.
• Thesis invalidated if inventory builds again faster than sales (DIO up sharply at Q3) together with slowing SportStyle. That would mark the end of the fashion cycle.

Monitoring

Scorecard

The total sits in the Buy band. The rating is Hold because the scorecard rewards business quality the price already reflects, while the scenario spread (+29% / −30%) leaves an expected return of only about 3–4%.

Fact-sheet flags

Computed by factsheet.mjs. Each flag is a prompt to investigate, not a conclusion.

• ▲amberinventory-outpacing-sales inventory grew 30.1% in 2025/12 (137,596 to 178,967) against sales growth of 19.5%
• iinfonet-cash Net cash of 13,738 in 2025/12 (BS_NET_DEBT -13,738)
• iinfoguidance-revised-up 2026/12 guidance raised on 2026-08-14: sales 950,000 to 1,050,000, op 171,000 to 195,000, rp 165,000 to 189,000, np 110,000 to 120,000
• iinfoconsensus-rising 2026/12 consensus OP changed +10.1% over 3 months to 200,426

Sources and limitations

• filings/2025-12_FY_短信_20260213.pdf: FY2025 results, dividend policy p.11, FX rates p.30.
• filings/2025-12_FY_有報_20260304.pdf: MTP2026 p.15 and p.50, risk factors p.37–40, cross-shareholdings p.103, customers p.154.
• filings/2026-12_Q2_短信_20260814.pdf: p.1 summary and guidance, p.4–8 commentary, categories and segments, p.9 BS, p.11 P&L, p.13–14 CF, p.18 FX and regions. Printed page numbers are two lower.
• IFIS snapshot data/7936/2026-10-17/: fact sheet, report_est consensus and ratings (2026-10-16).
• Gendai (Money Gendai), 2026-10-14: article 171817 (price path, buyback rationale) and article 171818 (FX assumptions, BoJ 2026-09-18, FX levels). Secondary.
• Bloomberg JP, 2026-10-16, "物言う株主のオアシス、アシックス株を保有". The headline was seen in search only, because the page returned HTTP 403. Stake size unknown.
• TipRanks / MarketScreener summaries of the 2026-09-09 buyback notice and its progress to 2026-09-30. Secondary. Confirm on TDnet.
• SGI Europe, May 2026 (Q1 reaction). Yahoo! Finance Japan quotes for 8022 and 8111 (2026-10-16).
• Limitations: No 説明会 deck in the snapshot, so H2 assumptions by region and currency are not checked against the company's own sensitivity table. The FX assumption (USD ¥160 / EUR ¥180) is from the press, not the filing. The Q3 date is not confirmed on the IR site. Global peer multiples were not collected. TDnet and Bloomberg were not fetched directly (403).
• This is research, not individualised investment advice.