Asics, the Japanese maker of running shoes and the Onitsuka Tiger brand, set a sales target of 1.5 trillion yen for 2029 on Friday, about 43% above the 1.05 trillion yen it expects this year, and said it will hand about 400 billion yen back to shareholders over the next three years.

The Kobe-based company announced the three-year plan alongside nine-month results that set records for sales and profit. The plan shows where it expects the next leg of growth to come from: lifestyle sneakers in the West, running shoes in China, India and Southeast Asia, and a fashion label it now wants to run as a separate business.

Record nine months, forecast unchanged

Sales rose 28.8% from a year earlier to 805.2 billion yen in the nine months to September, the first time the company has passed 800 billion yen in that period, according to its earnings statement filed with the Tokyo Stock Exchange. Excluding currency moves, growth was 19.2%. Operating profit rose 37.5% to 175.5 billion yen and net profit rose 32.9% to 114.7 billion yen. The operating margin widened 1.4 percentage points to 21.8%.

The fastest growth came from SportStyle, the company's range of retro and lifestyle sneakers, where sales jumped 70.0% to 185.4 billion yen and category profit rose 85.9%. Onitsuka Tiger sales rose 34.6% to 134.5 billion yen, helped by spending from foreign visitors in Japan, the company said. Performance running, still the largest category, grew 15.8% to 329.3 billion yen, or 6.0% excluding currency effects.

Every region reported higher sales and profit. Europe, the largest, grew 37.3% to 245.7 billion yen. North American sales rose 25.5% and segment profit there rose 68.5%. Greater China sales rose 28.2% to 119.1 billion yen, and Southeast and South Asia grew 29.1%. Capital Times has separately covered third-quarter sales at Anta and Li Ning and Japan's tax-free refund system for visitors.

Asics left its full-year forecast unchanged at sales of 1.05 trillion yen, operating profit of 195 billion yen and net profit of 120 billion yen. With 175.5 billion yen already booked, that implies operating profit of about 19.5 billion yen in the final quarter, on sales of about 245 billion yen. Chairman Yasuto Hirota said he was confident of reaching the plan, citing October sales, visitor demand in Japan and clearance sales in each region, WWD Japan reported.

On orders, the company said bookings for performance running shoes for spring and summer 2027 were level with a year earlier in both Europe and the United States as of late October, while SportStyle orders were up more than 30% in Europe and more than 50% in the United States, according to WWD Japan.

What the 2029 plan promises

The new plan covers 2027 to 2029 and carries the theme "AHEAD OF THE GAME." It is the first time Asics has made a sales figure one of its management targets, WWD Japan reported. The target assumes annual growth of a little over 13%, with double-digit growth in every category and region, and an operating margin held at or above this year's forecast of 18.6%. The plan assumes exchange rates of 160 yen to the dollar, 180 yen to the euro and 23 yen to the yuan.

By category, Asics expects SportStyle sales to reach 380 billion yen in 2029 from a forecast 242 billion yen this year, and performance running to reach 600 billion yen from 427 billion yen. By region, the steepest growth is planned in Asia. The Asics brand's Greater China sales are projected to rise 22% a year to 200 billion yen, India 27% a year to 31 billion yen and Southeast Asia 23% a year to 63.5 billion yen, against about 10% a year in North America and 9% in Europe.

Onitsuka Tiger will be separated into its own company from January 2027. Asics projects the brand's sales at 240 billion yen in 2029, up from a forecast 180 billion yen this year, with an operating margin of 28%.

Shareholder returns and a 50% ROE goal

The capital plan is the most aggressive part. Asics said it will set an "optimal" level of equity, based on its fixed assets plus a buffer for business risk, and return anything above that. It estimates dividends and buybacks of about 400 billion yen from 2027 to 2029, a total payout ratio of 80%, compared with about 75% over 2024 to 2026. Return on equity is projected at 50% in 2029, against a forecast 39% this year.

The company also plans about 200 billion yen of capital spending and leases over the three years, on stores, data and artificial intelligence systems, research facilities, factories and warehouse automation. Acquisitions would come on top of that. Hirota said there was no specific deal in hand at present, WWD Japan reported.

The plan follows a share buyback of up to 70 billion yen announced Sept. 9. WWD Japan reported at the time that the shares had fallen to 4,000 yen from a peak of 5,281 yen on Aug. 14. In its review of the outgoing plan, Asics said its market value reached a record 3.88 trillion yen on that August date, up from 810 billion yen at the end of 2023, when annual sales were 570.4 billion yen.

The next test is the fourth quarter and the full-year results that follow. The Onitsuka Tiger separation takes effect in January.