During the fiscal 2006, ended March 31, 2006, the Japanese economy recovered steadily, backed by ongoing increases in capital investment due to improving corporate profits and by steadily increasing personal consumption. The global economy was generally strong despite surging crude oil prices, appreciation of the Chinese yuan, major hurricanes in the United States, and other adversities.
In the sporting goods industry, the Turin Winter Olympic Games and growing interest in sports amid rising health consciousness helped spur strong performance on the whole.
Amid these conditions, the ASICS Group worked to expand its running gear business, particularly running shoes, and further enhance its brand image through such means as providing shoes and sportswear to the convention staff as a sponsor of the ING New York City Marathon 2006. In addition, the Company developed and expanded operations in the global market. For instance, we opened directly managed stores for the Onitsuka Tiger brand in Japan and abroad. In Japan, the Company strived to hone its image as a maker of fitness walking shoes. For example, we expanded our lineup of Hadashi Walker shoes, which create a sensation that the wearer is walking comfortably on bare feet, and we held walking events and promoted sales through Mr. Duke Saraie, a specialist in walking exercise as part of initiatives for further boosting the image of our fitness walking shoes.
Furthermore, ASICS has expanded its lineup of children's shoes based on its research into the particular ways children move their feet in walking and running and strengthened sales promotion through retail and other means in order to increase sales. For the Turin Winter Olympics, ASICS Italia S.p.A., a subsidiary, was an official sponsor, and concerted efforts were made to further elevate the image of the ASICS Group and further heighten brand awareness.
Consolidated net sales increased 16.6% year on year, to \171,036 million, in the fiscal year under review. While sales of sportswear was weak, fitness walking shoes and sports style shoes recorded healthy gains, which contributed to 2.0% increase in domestic sales amounted to \78,958 million.
Overseas sales rise 32.9%, to \92,078 million, backed by ongoing growth in sales of running shoes and sports style shoes, particularly in Europe and the North America. Higher sales and an improving of cost of sales ratio were the main factors elevating income. Operating income increased 66.2%, to \16,444 million and net income was up 97.1%, to \13,806 million.