Snow Peak develops, manufactures, and sells high-end camping items: The company offers about 600 different products for campers, with main product categories including tents and tarps, cookware, tableware, and furniture. In FY12/14, it also entered the Apparel business, which accounted for 10.1% of total sales in FY12/21. By region, Japan accounted for 76.1% of sales while overseas operations (in the US, Taiwan, South Korea, UK, etc.) accounted for 23.9% in the same year.

Premium products: Snow Peak’s product prices are 2–5x higher than competitors’ products. The company says it differentiates itself with user-driven product development.

User-driven development: Snow Peak has handled car camping goods for half of the 60 years since its founding. The company explains that based on its philosophy of user-driven development, it provides customers with products its own employees would use. Product development managers handle all stages from planning through outsourced manufacturing, and conduct repeated product testing under real conditions. All products come with lifetime guarantees. This allows the company to generate long-selling products that sell for relatively high prices.

Relationship with customers: Snow Peak builds close relationships with customers by organizing camping events and running social media sites. Shared Research understands this enables the company to reflect customer feedback in its product development and improvement, as well as encourages customers to recommend products to other customers.

Metalworking techniques of Tsubame-Sanjo: Snow Peak develops products in-house but outsources production to factories in the Tsubame-Sanjo region, where the company is headquartered. Snow Peak explains that the area is home to numerous metalworking factories that have the people, equipment, and expertise necessary to manufacture metal products. In FY12/20, of the 600 camping goods the company handled, about half were hardware and tableware, and the bulk of these goods were manufactured in the Tsubame-Sanjo area.

Lower distribution costs due to direct transactions: Snow Peak sells directly to retailers rather than through wholesalers. It says this approach keeps distribution costs down and lowers in-store prices by around 25%.

Trends and outlook

In FY12/21, the company reported consolidated sales of JPY25.7bn (+53.4% YoY), operating profit of JPY3.8bn (+155.8% YoY), recurring profit of JPY4.0bn (+160.2% YoY), and net income attributable to owners of the parent of JPY2.7bn (+160.1% YoY). Backed by an increase in worldwide camping demand, sales improved in all channels and all regions.

In FY12/22, the company forecasts sales of JPY32.7bn (+27.2% YoY), operating profit of JPY5.2bn (+37.0% YoY), recurring profit of JPY5.2bn (+29.4% YoY), and net income attributable to owners of the parent of JPY3.3bn (+21.0% YoY).

Under its medium-term business plan, Snow Peak is targeting FY12/24 sales of JPY49.5bn (CAGR of 24.4% from FY12/21) and operating profit of JPY10.0bn (CAGR of 37.8%). The company expects sales growth in Japan to come from the expanding camping market and Snow Peak Way events held to stimulate experience-based spending. Overseas, it is looking to promote understanding of the functionality and quality of its products and increase sales of its merchandise by operating campgrounds and developing stores, with a focus on directly managed stores, and implementing a wholesale strategy involving setting up dedicated Snow Peak areas in outdoor retailers.

Strengths and weaknesses

Shared Research thinks Snow Peak’s strengths are differentiation through user-driven product development, access to Tsubame-Sanjo metalworking techniques, and low distribution costs due to cutting out wholesalers. We consider Snow Peak’s weaknesses to be the difficulty in differentiating designs despite prices being 2–3x higher than industry peers’, limited replacement demand due to high durability, and a low share of overseas markets amid a maturing domestic market. (See the Strengths and weaknesses section.)

Key financial data

Income statement		FY12/12	FY12/13	FY12/14	FY12/15	FY12/16	FY12/17	FY12/18	FY12/19	FY12/20	FY12/21	FY12/22
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Est.
Sales		3,693	4,487	5,559	7,854	9,222	9,910	12,071	14,261	16,765	25,714	32,700
	YoY	13.6%	21.5%	23.9%	41.3%	17.4%	7.5%	21.8%	18.1%	17.6%	53.4%	27.2%
Gross profit		1,774	2,222	2,710	3,606	4,649	4,931	6,433	7,720	9,275	14,139
	YoY	10.6%	25.3%	21.9%	33.1%	28.9%	6.1%	30.5%	20.0%	20.1%	52.4%
	Gross profit margin	48.0%	49.5%	48.7%	45.9%	50.4%	49.8%	53.3%	54.1%	55.3%	55.0%
Operating profit		37	113	231	568	853	-142	920	924	1,493	3,819	5,232
	YoY	-38.7%	207.1%	104.2%	145.7%	50.1%	-	-	0.4%	61.6%	155.8%	37.0%
	Operating profit margin	1.0%	2.5%	4.2%	7.2%	9.3%	-	7.6%	6.5%	8.9%	14.9%	16.0%
Recurring profit		219	288	272	518	806	-39	883	963	1,551	4,035	5,221
	YoY	329.2%	31.8%	-5.7%	90.3%	55.6%	-	-	9.0%	61.1%	160.2%	29.4%
	Recurring profit margin	5.9%	6.4%	4.9%	6.6%	8.7%	-	7.3%	6.8%	9.3%	15.7%	16.0%
Net income		133	177	116	285	485	-251	479	425	1,048	2,727	3,300
	YoY	484.5%	33.6%	-34.3%	144.6%	70.3%	-	-	-11.1%	146.4%	160.1%	21.0%
	Net margin	3.6%	4.0%	2.1%	3.6%	5.3%	-	4.0%	3.0%	6.3%	10.6%	10.1%
Per-share data
Shares issued (year-end; '000)		88	88	1,760	7,040	7,040	14,080	15,480	17,490	17,490	38,140
EPS		25.9	34.6	22.3	43.3	17.3	-9.0	16.8	13.5	28.2	72.2	87.2
EPS (fully diluted)		-	-	-	-	-	-	16.6	13.4	-	-
Dividend per share		0.6	0.6	0.6	5.0	15.0	12.5	12.5	12.5	12.5	10.0	12.0
Book value per share		228.2	262.0	330.1	580.0	158.3	147.8	206.5	247.9	280.6	366.0
Balance sheet (JPYmn)
	Cash and cash equivalents	205	245	913	2,109	1,160	994	3,012	3,298	2,698	3,819
Total current assets		1,533	1,759	2,476	4,100	3,482	4,111	6,412	7,729	6,944	9,890
Tangible fixed assets		1,982	2,035	1,958	2,037	3,819	4,325	4,138	4,840	7,578	8,675
Investments and other assets		223	326	320	399	580	705	1,079	1,578	1,668	2,189
Intangible assets		227	243	237	307	419	702	589	767	676	565
Total assets		3,965	4,364	4,991	6,842	8,299	9,843	12,218	14,915	16,866	21,319
	Accounts payable	103	94	57	123	127	172	316	319	612	678
	Short-term interest-bearing debt	675	895	792	666	707	2,455	2,554	3,686	1,133	1,827
Total current liabilities		1,061	1,309	1,253	1,423	1,634	3,227	4,049	5,220	3,581	5,099
	Long-term interest-bearing debt	1,173	1,119	908	605	1,382	1,522	796	30	1,277	925
Total fixed liabilities		1,736	1,712	1,573	1,354	2,223	2,465	1,784	1,143	2,706	2,371
Total liabilities		2,796	3,021	2,826	2,777	3,857	5,692	5,833	6,363	6,287	7,469
Total net assets		1,169	1,342	2,164	4,065	4,442	4,150	6,385	8,552	10,579	13,850
Total interest-bearing debt		1,848	2,014	1,700	1,271	2,089	3,977	3,350	3,716	2,410	2,752
Cash flow statement (JPYmn)
Cash flows from operating activities		358	247	518	380	728	-287	1,437	496	2,957	2,665
Cash flows from investing activities		-237	-360	-223	-370	-2,387	-1,661	-556	-1,949	-3,213	-1,733
Cash flows from financing activities		-110	140	368	1,186	712	1,775	1,145	1,739	-316	85
Financial ratios
ROA (RP-based)		5.5%	6.9%	5.8%	8.8%	10.6%	-	8.0%	7.1%	9.8%	21.1%
ROE		11.4%	14.1%	6.6%	9.1%	11.4%	-	9.1%	5.7%	11.0%	22.3%
Equity ratio		29.5%	30.8%	43.4%	59.4%	53.3%	42.1%	52.1%	57.2%	62.7%	64.9%

Source: Shared Research based on company data
Note: Amounts in the table may differ from company data due to differences in rounding methods.
Note: Net income refers to net income attributable to owners of the parent.
Note: The company carried out a 2-for-1 split of its common shares effective December 1, 2021. The per-share data from the above table are adjusted to reflect the stock split.

Recent updates

Releases Monthly Sales Data

2022-05-13

Snow Peak, Inc announced monthly sales and store count data for April 2022.

2022
By country/region		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Total		63.1%	44.0%	22.6%	29.8%
Japan		55.5%	31.8%	14.2%	25.9%
US		129.6%	79.9%	30.2%	48.1%
South Korea		106.9%	110.0%	72.6%	46.7%
Taiwan		25.6%	82.0%	67.8%	8.8%
UK		133.0%	116.9%	37.5%	67.6%
Other overseas		43.2%	102.5%	26.0%	33.2%
By channel (Japan)		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Direct sales channels total		26.8%	-4.1%	-1.6%	27.1%
	Directly managed stores	28.0%	-14.1%	1.0%	24.5%
	Snow Peak online store	23.2%	27.2%	-7.9%	33.3%
Wholesale, other		74.9%	48.3%	23.1%	19.8%
Store count (Japan)		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Directly managed stores		32	32	32	34
In-store		71	71	72	76
Shop-in-shop		205	205	208	210
Entry stores		257	256	255	255

2021
By country/region		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Total		64.7%	59.3%	63.3%	132.2%	114.6%	53.7%	51.9%	26.6%	38.5%	45.2%	46.6%	19.3%
Japan		59.4%	60.9%	46.4%	140.0%	121.9%	52.5%	45.7%	19.4%	30.6%	34.6%	32.8%	6.7%
US		62.5%	67.2%	297.0%	104.8%	98.2%	31.9%	133.5%	31.5%	52.2%	40.0%	72.0%	60.4%
South Korea		109.4%	86.0%	117.7%	90.2%	73.8%	79.1%	19.3%	53.1%	72.5%	113.2%	137.9%	112.3%
Taiwan		52.8%	7.5%	37.5%	43.9%	91.5%	16.7%	29.2%	91.6%	86.4%	93.7%	54.5%	21.6%
Other overseas		254.1%	31.7%	339.7%	540.9%	367.3%	117.0%	311.4%	149.5%	73.0%	148.1%	127.7%	145.0%
By channel (Japan)		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Direct sales channels total		24.5%	64.7%	57.1%	170.4%	84.2%	36.0%	54.8%	10.7%	18.7%	29.8%	19.4%	9.0%
	Directly managed stores	12.0%	48.1%	40.9%	558.1%	247.0%	44.1%	57.9%	-2.8%	13.3%	25.2%	9.3%	4.8%
	Snow Peak online store	90.4%	153.2%	120.4%	10.8%	-20.6%	15.0%	45.7%	79.2%	39.9%	48.4%	68.7%	24.5%
Wholesale, other		90.5%	62.3%	41.3%	145.5%	131.9%	62.8%	47.0%	24.1%	37.9%	40.9%	38.4%	4.5%
Store count (Japan)		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Directly managed stores		33	31	31	32	33	33	33	33	33	33	33	33
In-store		70	71	73	73	73	73	73	73	71	71	71	71
Shop-in-shop		187	187	187	194	193	193	195	197	200	204	206	206
Entry stores		249	246	249	251	251	253	256	255	253	253	254	256

Trends and outlook

Quarterly trends and results

Cumulative		FY12/21				FY12/22				FY12/22
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales		5,046	11,673	18,393	25,714	7,084				21.7%	32,700
	YoY	62.5%	77.6%	61.0%	53.4%	40.4%					27.2%
Gross profit		2,723	6,402	10,115	14,139	3,774
	YoY	60.3%	75.7%	61.7%	52.4%	38.6%
	Gross profit margin	54.0%	54.8%	55.0%	55.0%	53.3%
SG&A expenses		2,163	4,788	7,558	10,319	2,839
	YoY	27.7%	41.6%	38.4%	32.6%	31.3%
	SG&A ratio	42.9%	41.0%	41.1%	40.1%	40.1%
Operating profit		560	1,613	2,557	3,819	935				17.9%	5,232
	YoY	-	513.5%	222.1%	155.8%	67.0%					37.0%
	Operating profit margin	11.1%	13.8%	13.9%	14.9%	13.2%					16.0%
Recurring profit		630	1,714	2,696	4,035	976				18.7%	5,221
	YoY	-	591.3%	236.4%	160.2%	54.9%					29.4%
	Recurring profit margin	12.5%	14.7%	14.7%	15.7%	13.8%					16.0%
Net income		410	1,131	1,767	2,727	642				19.5%	3,300
	YoY	330.4%	450.9%	214.5%	160.1%	56.4%					21.0%
	Net margin	8.1%	9.7%	9.6%	10.6%	9.1%					10.1%
Quarterly		FY12/21				FY12/22
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		5,046	6,627	6,720	7,320	7,084
	YoY	62.5%	91.0%	38.6%	37.0%	40.4%
Gross profit		2,723	3,679	3,713	4,024	3,774
	YoY	60.3%	89.1%	42.1%	33.3%	38.6%
	Gross profit margin	54.0%	55.5%	55.3%	55.0%	53.3%
SG&A expenses		2,163	2,625	2,770	2,761	2,839
	YoY	27.7%	55.6%	33.0%	19.0%	31.3%
	SG&A ratio	42.9%	39.6%	41.2%	37.7%	40.1%
Operating profit		560	1,053	943	1,263	935
	YoY	-	308.3%	77.7%	80.5%	67.0%
	Operating profit margin	11.1%	15.9%	14.0%	17.2%	13.2%
Recurring profit		630	1,084	983	1,339	976
	YoY	-	314.5%	77.5%	78.6%	54.9%
	Recurring profit margin	12.5%	16.4%	14.6%	18.3%	13.8%
Net income		410	721	635	961	642
	YoY	330.4%	555.3%	78.3%	97.4%	56.4%
	Net margin	8.1%	10.9%	9.5%	13.1%	9.1%

Source: Shared Research based on company data
Note: Amounts in the table may differ from company data due to differences in rounding methods.

Because Snow Peak primarily sells car camping goods, sales tend to be higher in Q2 and Q3 (spring to summer) than Q4 and Q1 (autumn to winter).

SG&A expenses

Cumulative			FY12/21				FY12/22
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
SG&A expenses			2,163	4,788	7,558	10,319	2,839
	YoY		27.7%	41.6%	38.4%	32.6%	31.3%
	Personnel expenses		944	2,153	3,316	4,528	1,271
		YoY	21.2%	38.7%	36.5%	33.3%	34.6%
	Rents		203	410	643	874	212
		YoY	17.4%	33.1%	9.1%	8.5%	4.6%
	Depreciation		162	334	514	703	206
		YoY	40.8%	34.7%	28.6%	21.7%	27.3%
	Other		854	1,891	3,085	4,213	1,150
		YoY	36.3%	48.6%	50.9%	40.4%	34.6%
Quarterly			FY12/21				FY12/22
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SG&A expenses			2,163	2,625	2,770	2,761	2,839
	YoY		27.7%	55.6%	33.0%	19.0%	31.3%
	Personnel expenses		944	1,210	1,163	1,212	1,271
		YoY	21.2%	56.3%	32.7%	25.2%	34.6%
	Rents		203	207	233	232	212
		YoY	17.4%	53.3%	-17.1%	6.7%	4.6%
	Depreciation		162	172	180	189	206
		YoY	40.8%	29.5%	18.7%	6.0%	27.3%
	Other		854	1,037	1,194	1,128	1,150
		YoY	36.3%	60.6%	54.5%	18.1%	34.6%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Number of stores

		FY12/21				FY12/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Directly managed stores		39	41	43	43	42
	Japan	31	33	33	33	32
	Overseas	8	8	10	10	10
In-store		73	73	71	71	74
	Japan	73	73	71	71	72
Shop-in-shop		210	219	228	235	236
	Japan	187	193	200	206	208
	Overseas	23	26	28	29	28
Entry stores		252	256	256	259	260

Source: Shared Research based on company data

Sales by business (including overseas sales)

Cumulative			FY12/21				FY12/22
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Total sales			5,046	11,673	18,393	25,714	7,084
	YoY		62.5%	77.6%	61.0%	53.4%	40.4%
	Outdoor		3,950	9,620	15,190	20,980	5,790
		YoY	64.6%	80.8%	65.8%	59.5%	46.6%
	Apparel		620	1,120	1,780	2,590	770
		YoY	51.2%	57.7%	38.0%	23.3%	24.2%
	Urban Outdoor		60	130	220	290	50
		YoY	100.0%	62.5%	120.0%	61.1%	-16.7%
	Regional Revitalization		90	120	130	210	40
		YoY	125.0%	100.0%	85.7%	16.7%	-55.6%
	Business Solutions		220	460	710	990	290
		YoY	37.5%	43.8%	42.0%	35.6%	31.8%
	Campground		40	100	180	260	50
		YoY	0.0%	66.7%	5.9%	4.0%	25.0%
	Snow Peak EAT		60	120	180	370	100
		YoY	100.0%	140.0%	38.5%	68.2%	66.7%
Quarterly			FY12/21				FY12/22
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Total sales			5,046	6,627	6,720	7,320	7,084
	YoY		62.5%	91.0%	38.6%	37.0%	40.4%
	Outdoor		3,950	5,670	5,570	5,790	5,790
		YoY	64.6%	94.2%	45.1%	45.1%	46.6%
	Apparel		620	500	660	810	770
		YoY	51.2%	66.7%	13.8%	0.0%	24.2%
	Urban Outdoor		60	70	90	70	50
		YoY	100.0%	40.0%	350.0%	-12.5%	-16.7%
	Regional Revitalization		90	30	10	80	40
		YoY	125.0%	50.0%	0.0%	-27.3%	-55.6%
	Business Solutions		220	240	250	280	290
		YoY	37.5%	50.0%	38.9%	21.7%	31.8%
	Campground		40	60	80	80	50
		YoY	0.0%	200.0%	-27.3%	0.0%	25.0%
	Snow Peak EAT		60	60	60	190	100
		YoY	100.0%	200.0%	-25.0%	111.1%	66.7%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Note: Business Solutions denotes sales from Snow Peak Business Solutions Inc., which is comprised of Camping Office sales and sales from the system development business of Heartis System & Consulting Inc. (acquired through absorption-type merger in January 2019).

Sales by region

Cumulative			FY12/21				FY12/22
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales			5,046	11,673	18,393	25,714	7,084
	YoY		62.5%	77.6%	61.0%	53.4%	40.4%
	Japan		3,950	8,980	14,120	19,560	5,210
		YoY	54.3%	73.7%	55.3%	45.5%	31.9%
	US		350	800	1,300	1,850	600
		YoY	118.8%	90.5%	80.6%	74.5%	71.4%
	South Korea		370	1,080	1,720	2,430	680
		YoY	105.6%	89.5%	72.0%	81.3%	83.8%
	Taiwan		180	360	530	780	270
		YoY	38.5%	38.5%	47.2%	52.9%	50.0%
	UK		90	200	330	500	160
		YoY	350.0%	400.0%	312.5%	284.6%	77.8%
Quarterly			FY12/21				FY12/22
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales			5,046	6,627	6,720	7,320	7,084
	YoY		62.5%	91.0%	38.6%	37.0%	40.4%
	Japan		3,950	5,030	5,140	5,440	5,210
		YoY	54.3%	92.7%	31.1%	25.1%	31.9%
	US		350	450	500	550	600
		YoY	118.8%	73.1%	66.7%	61.8%	71.4%
	South Korea		370	710	640	710	680
		YoY	105.6%	82.1%	48.8%	108.8%	83.8%
	Taiwan		180	180	170	250	270
		YoY	38.5%	38.5%	70.0%	66.7%	50.0%
	UK		90	110	130	170	160
		YoY	350.0%	450.0%	225.0%	240.0%	77.8%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Sales by sales channel (Japan)

Cumulative				FY12/21				FY12/22
(JPYmn)				Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales				3,950	8,980	14,120	19,560	5,210
	YoY			54.3%	73.7%	55.3%	45.5%	31.9%
	Directly managed stores			810	1,810	2,870	4,150	860
		YoY		30.6%	70.8%	47.2%	35.6%	6.2%
		% of total		20.5%	20.2%	20.3%	21.2%	16.5%
	Snow Peak online store			280	630	990	1,380	320
		YoY		115.4%	31.3%	39.4%	42.3%	14.3%
		% of total		7.1%	7.0%	7.0%	7.1%	6.1%
	In-store			850	2,020	3,070	4,250	880
		YoY		44.1%	60.3%	33.5%	25.0%	3.5%
		% of total		21.5%	22.5%	21.7%	21.7%	16.9%
	Wholesale dealers(E-commerce(卸) を含む)			1,740	4,010	6,440	8,660	2,850
		YoY		64.2%	94.7%	79.9%	68.2%	63.8%
		% of total		44.1%	44.7%	45.6%	44.3%	54.7%
		E-commerce (wholesale)		360	850	1,270	1,690
			YoY	125.0%	123.7%	76.4%	67.3%
			% of total	9.1%	9.5%	9.0%	8.6%
		Wholesale dealers		1,380	3,160	5,170	6,970
			YoY	53.3%	88.1%	80.8%	68.4%
			% of total	34.9%	35.2%	36.6%	35.6%
Quarterly				FY12/21				FY12/22
(JPYmn)				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales				3,950	5,030	5,140	5,440	5,210
	YoY			54.3%	92.7%	31.1%	25.1%	31.9%
	Directly managed stores			810	1,000	1,060	1,280	860
		YoY		30.6%	127.3%	19.1%	15.3%	6.2%
		% of total		20.5%	19.9%	20.6%	23.5%	16.5%
	Snow Peak online store			280	350	360	390	320
		YoY		115.4%	0.0%	56.5%	50.0%	14.3%
		% of total		7.1%	7.0%	7.0%	7.2%	6.1%
	In-store			850	1,170	1,050	1,180	880
		YoY		44.1%	74.6%	1.0%	7.3%	3.5%
		% of total		21.5%	23.3%	20.4%	21.7%	16.9%
	Wholesale dealers (includes e-commerce (wholesale))			1,740	2,270	2,430	2,220	2,850
		YoY		64.2%	127.0%	59.9%	41.4%	63.8%
		% of total		44.1%	45.1%	47.3%	40.8%	54.7%
		E-commerce (wholesale)		360	490	420	420
			YoY	125.0%	122.7%	23.5%	44.8%
			% of total	9.1%	9.7%	8.2%	7.7%
		Wholesale dealers		1,380	1,780	2,010	1,800
			YoY	53.3%	128.2%	70.3%	40.6%
			% of total	34.9%	35.4%	39.1%	33.1%

Source: Shared Research based on company data
Notes: Figures may differ from company data due to differences in rounding methods.
Sales previously (until FY12/21) disclosed as e-commerce (wholesale) will be included in wholesale dealers from FY12/22.

Q1 FY12/22 results

Sales: JPY7.1bn (+40.4% YoY)
Operating profit: JPY935.0mn (+67.0% YoY)
Recurring profit: JPY976.0mn (+54.9% YoY)
Net income attributable to owners of the parent: JPY642.0mn (+56.4% YoY)

The company applied the Accounting Standard for Revenue Recognition from the beginning of Q1 FY03/22. As a result of the change in accounting policy, sales, CoGS, and SG&A expenses decreased by JPY55mn, JPY21mn, and JPY38mn, respectively, in Q1, while operating profit, recurring profit, and net income attributable to owners of the parent increased by JPY5mn, respectively.

In the outdoor industry, the number of customers visiting directly-managed stores declined due to the resurgence of COVID-19 both in Japan and overseas. However, there was continued robust demand for activities, such as outdoor leisure, that avoid the 3 C’s (confined spaces, crowds, and close-contact settings). Demand for camping also stayed strong: camping has become an all-year activity and increasingly diversified, with a diverse group of people enjoying camping.

Q1 FY12/22 results were higher YoY across all regions and channels. Although January through March is usually the off-season for camping, in addition to increased sales of winter camping products, camping equipment sales performed well from early in Q1 for the camping season starting in the spring.

Sales: Domestic business

In Japan, camping demand remained high following on from the previous year. Although the resurgence of COVID-19 led to a decline in the number of customers visiting some stores, customer traffic increased YoY. Sales increased in all channels due to expanded store space at wholesale customers and an increase in deliveries following the opening of new stores. Sales were strong at Snow Peak Business Solutions as it continued to focus on providing business support for digital transformation and human resources development for the group as a whole.

Sales: Overseas business

While some areas were affected by the resurgence in COVID-19 cases, sales in all countries were higher YoY due to continued strong demand for camping worldwide. Sales by country were as follows.

In South Korea, as in Japan, camping demand remained high, and sales were strong through all channels. Sales in China, where the company is strengthening sales through cross-border e-commerce from South Korea, also increased YoY, despite concerns about a significant decline in consumer demand due to the lockdown in major urban areas.

In Taiwan, camping demand remained high, and sales through directly managed stores and through e-commerce and wholesale channels were all strong.

In the US, sales of tents and furniture were strong due to the success of retail sales initiatives that began in FY12/21, despite the impact of distribution delays. In FY12/22, in addition to sales initiatives aimed at expanding the entry-level segment, especially fire pits, the company will focus on cultivating new customers and enhancing brand recognition through experience-based consumption.

In the UK, the supply situation remained unstable due to logistics disruptions, but the company successfully developed new wholesale customers and expanded its e-commerce activities. Results were ahead of Q1 FY12/21.

Full-year company forecast

		FY12/20			FY12/21			FY12/22
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Act.	FY Act.	FY Est.
Sales		6,574	10,191	16,765	11,673	14,040	25,714	32,700
	YoY	-4.2%	37.8%	17.6%	77.6%	37.8%	53.4%	27.2%
Cost of goods sold		2,930	4,559	7,489	5,271	6,303	11,575
Gross profit		3,644	5,632	9,275	6,402	7,737	14,139
	YoY	-0.4%	38.7%	20.1%	75.7%	37.4%	52.4%
	Gross profit margin	55.4%	55.3%	55.3%	54.8%	55.1%	55.0%
SG&A expenses		3,381	4,401	7,782	4,788	5,531	10,319
	SG&A ratio	51.4%	43.2%	46.4%	41.0%	39.4%	40.1%
Operating profit		263	1,230	1,493	1,613	2,206	3,819	5,232
	YoY	-44.2%	171.9%	61.6%	513.5%	79.3%	155.8%	37.0%
	Operating profit margin	4.0%	12.1%	8.9%	13.8%	15.7%	14.9%	16.0%
Recurring profit		248	1,303	1,551	1,714	2,322	4,035	5,221
	YoY	-48.8%	172.2%	61.1%	591.3%	78.2%	160.2%	29.4%
	Recurring profit margin	3.8%	12.8%	9.3%	14.7%	16.5%	15.7%	16.0%
Net income		205	843	1,048	1,131	1,596	2,727	3,300
	YoY	-39.4%	873.8%	146.4%	450.9%	89.3%	160.1%	21.0%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Note: Net income refers to net income attributable to owners of the parent.

The company intends to focus on the following three areas in FY12/22

Creating customer acquisition opportunities by bolstering the channels (wholesale, experience-based locations) focused on creating new customers.

Using in-person and online strategies to encourage existing customers to become loyal customers

Maintaining product strategies focused on fire pits and strengthening the lineup of entry-level products, while simultaneously developing products, including furniture and high-end products, that meet the increasingly diverse needs of the company's customers. Through these efforts, the company aims to increase the number of new customers as well as the LTV of existing customers.

The company has adopted the following regional assumptions:

In Japan, the company projects sales will rise about 15% YoY. In FY12/22, the company does not anticipate a rise in camping-related demand, but it aims to increase sales by expanding its share of the camping market. In Japan, the company will continue to implement measures aimed at strengthening its sales channels, including building experience locations for its directly managed stores and expanding the wholesale store network. It will also work to increase the number of new customers and encourage existing customers to become loyal customers by strengthening its experiences network, which includes its partners, and by making effective use of the membership system launched in 2021.

The company projects sales in South Korea and Taiwan will respectively increase by approximately 30% and 10% YoY. In these regions, the company will leverage the brand recognition it has built up to strengthen its sales channels, including by building experience locations for directly managed stores and expanding its wholesale store network. Snow Peak is aiming to strengthen its sales in the Chinese market through cross-border e-commerce from South Korea. Within this market, the company will establish business foundations and customer bases primarily by expanding its existing sales channels (cross-border e-commerce and wholesale).

The company projects sales in the US will increase by approximately 90% YoY. In this region, the company on the wholesale side will leverage the strategic partnerships established in FY12/21 to develop store networks, camping-related product lineups, and communities. On the directly managed store side, the company will work to build its brand by advancing the engagement of loyal customers and expanding brand awareness through in-person and online strategies.

In the UK, the company anticipates sales will increase by 40% YoY. In this region, the company will use its wholesale channels and online store to advance its development of the European market from FY12/22.

While noting the potential for skyrocketing material costs and ongoing yen depreciation to increase its CoGS ratio, the company expects that ratio to remain at the same level as in FY12/21 (45.0%) thanks to the positive effects from production transfers and product price hikes (prices of some products were raised by 5–10% beginning in January 2022). In terms of SG&A expenses, the company expects an increase in depreciation and personnel expenses in line with the launch of new DX systems, the bolstering of its global organization, and an increase in locations, including spa resorts.

Medium- to long-term outlook

The company updated its rolling medium-term business plan in February 2022. Covering the three-year period from FY12/22 through FY12/24, the plan sets a FY12/24 target for consolidated sales of JPY49.5bn (CAGR of 24.4% versus FY12/21) and operating profit of JPY10.0bn (CAGR of 37.8%). While maintaining double-digit annual average growth in Japan, the company will step up its overseas expansion, aiming to achieve an overseas sales ratio of 40% by FY12/24 (compared to 23.9% in FY12/21) and maintain ROE of 19% or above (22.3%).

In accordance with its medium-term business plan, the company will aim to increase sales in Japan by encouraging experience-based consumption through a variety of efforts (stepping up openings of directly managed campgrounds, etc.). Overseas, it aims to increase sales of its products by promoting understanding of the functionality and quality of these products through the operation of campgrounds and development of stores, with a focus on directly managed stores, and a wholesale strategy involving setting up dedicated Snow Peak areas in outdoor retailers.

Snow Peak expects operating profit to grow along with gross profit despite higher SG&A expenses. The main drivers of growth in SG&A expenses will be higher personnel expenses overseas due to store openings and higher depreciation due to digital transformation (discussed later).

The medium-term plan calls for opening 17 directly managed facilities (including 10 campgrounds) in Japan and 12 overseas. The company said it planned to open six facilities in the US, one in the UK, five in Taiwan and South Korea, and an unspecified number in China and other locations.

Medium-term business plan targets

Targets		FY12/21	FY12/22	FY12/23	FY12/24
(JPYmn)		Act.	Est.	Targets	Targets
Sales		25,714	32,700	40,200	49,500
	YoY	53.4%	27.2%	22.9%	23.1%
Operating profit		3,819	5,232	7,040	10,000
	YoY	155.8%	37.0%	34.6%	42.0%
	Operating profit margin	14.9%	16.0%	17.5%	20.2%

Source: Shared Research, based on company data

Medium-term business plan (sales by region)

Sales by region				FY12/21	FY12/24
(JPYmn)				Act.	Targets
Sales				25,714	49,500
	CAGR			-	24.4%
	Japan			19,560	29,600
		CAGR		-	14.8%
		% of total		76.1%	59.8%
	Europe, US			2,350	9,000
		CAGR		-	56.5%
		US		1,850
			CAGR	-
		UK		500
			CAGR	-
	Asia (excld. Japan)			3,210	8,400
		CAGR		-	37.8%
		Taiwan		780
			CAGR	-
		South Korea		2,430
			CAGR	-
		China		500	4,000
			CAGR	-	100.0%
	Other regions			600	2,500
		CAGR		-	60.9%

Source: Shared Research, based on company data

Major initiatives from FY12/22 to FY12/24

The company has adopted the following regional strategies:

Japan
In an effort to acquire new customers, Snow Peak will expand its sales network by opening directly managed stores and in-store shops. By the end of FY12/24, the company will open 17 directly managed stores (count of 33 stores at end-FY12/21) and 14 in-store shops (count of 71 shops at end-FY12/21). Of the directly managed facilities, 10 will be campgrounds (the company operated nine such facilities at end-FY12/21). The company intends to raise average customer spend by encouraging experience-oriented consumption through the opening of directly managed facilities that provide campgrounds and various hands-on camping activities (open-air campfires, etc.).

US
Snow Peak plans to sell products such as tents and fire pits primarily through wholesale channels. The company has formed a strategic partnership with REI, the largest outdoor retailer in the US, and intends to increase its sales by expanding the lineup of products it markets through REI. In FY12/23, the company plans to open campgrounds and launch a membership system, thereby raising the average customer spend.

UK
As in the US, Snow Peak plans to sell tents, fire pits, and other products mainly through wholesale channels. In FY12/22 and later, the company intends to expand into other European regions other than the UK.

Taiwan and South Korea
The company will strengthen its sales network by opening directly managed stores. In South Korea, the company will open new campgrounds before the end of FY12/23.

China
In FY12/21, Snow Peak limited its activities in China to expansion of its cross-border e-commerce business conducted through South Korea. However, in FY12/23, the company plans to cultivate new markets through wholesale channels.

Strengthening operations

The company is strengthening its production capacity and global logistics to build its platform for future growth.

In order to meet growing outdoor and camping demand, the company aims to put its merchandise procurement on a stable footing by manufacturing mainstay products which were previously made by a single manufacturer or at a single location to multiple manufacturers and/or locations. In FY12/21, Snow Peak had a manufacturing capacity that was capable of supporting JPY37.0bn in sales. By the end of FY12/22, the company aims to achieve a manufacturing capacity that can support JPY49.5bn in sales (projected sales for FY12/24).

In its global logistics operations, the company previously sent all products manufactured in Southeast Asia to logistics centers in Japan and then to sales locations overseas. From FY12/21, it will dispatch mainstay products from manufacturing sites directly to overseas sales locations. It aims to curtail the time and expense involved in transport. It also plans to develop logistics centers in individual countries commensurate with their sales during the medium-term plan period. In FY12/21, Snow Peak began direct deliveries of its mainstay products and expanded its warehouse facilities in the US. During FY12/22, the company plans to begin direct delivery of all products it markets overseas.

Digital transformation

The medium-term plan sets out the company’s digital transformation agenda, including beefing up the reservation website for campgrounds it operates, transitioning its social media-based customer community to its own smartphone app, and rolling out its smartphone app overseas. It plans to collaborate with Heartis employees to roll out the digital transformation initiatives. (In January 2019, the company merged with systems developer Heartis System & Consulting, formerly Heartis).

Long-term goals

The company believes that with the stresses of modern society, people are losing touch with nature. In developed countries, the company sees a growing desire to rediscover natural and human connections, which it thinks can be achieved through more exposure to nature and communication with family and friends, and it sees helping people reconnect with nature and with the people around them as its social mission. Leveraging its main business of developing, manufacturing, and selling camping goods, the company hopes to achieve this aim over the long term by operating campgrounds and developing other business lines including its Urban Outdoor business, its Business Solutions business, and its Camping Office business. Shared Research thinks this could lead to the company’s long-term expansion into various domains.

Snow Peak cites two studies by the Forestry and Forest Products Research Institute indicating that exposure to nature can help boost immunity and lower stress. The first study, entitled “A Clarification of the Physiological Effects on People of Exposure to Forest Environments,” suggests that spending time in forest atmospheres helps activate NK cells (“natural killer” cells, a type of lymphocyte and a component of the immune system). The second study, “A Scientific Clarification of the Physiological Effects of Forest Therapy,” indicates that forest environments are better than cities at stimulating parasympathetic nerve activity, which increases as people relax, and lowering sympathetic nerve activity, which drops as people relax. This study also points to a decreased concentration of cortisol (present in saliva), a representative stress hormone when in forests.

Business

Description

Develops, manufactures, and sells high-end items for camping enthusiasts

Snow Peak was founded in 1958 by Yukio Yamai, father of Toru Yamai, the current chairman. In 1986, the company began developing, manufacturing, and selling high-end camping items for car camping enthusiasts, and this business grew, sparked by the Japanese car camping boom in the early 1990s. The company develops tents and tarps, cookware, and tableware, and outsources most production to other factories. Snow Peak employees explain and sell the company’s products to customers at directly managed stores and sporting goods stores.

Car camping is a camping style that gained popularity in Japan in the late 1980s. Enthusiasts drive their vehicles to campsites and set up tents and tarps alongside their vehicles to enjoy living in nature. Car camping locations are divided into sections with space for a tent and parking. According to the Japan Car camping Federation, Japan has more than 1,300 car camping sites. Some locations have both tent sites and cabins (cottages, bungalows). Most are equipped with flush toilets and hot showers. Some camp sites even rent out tents, sleeping bags, stoves, and dishes.
Items considered essential for car camping include tents, tarps, sleeping bags, stoves, and tables. Tents are used as sleeping rooms and tarps provide living spaces, allowing each site to be divided into separate rooms.

Premium products

According to the company, Snow Peak’s products are known for their quality, such as durability and sturdiness, reflecting the commitment of the product development managers.

Because of the company’s insistence on quality and certain production methods, production costs are high, so it expects to earn an appropriate margin. Shared Research believes these factors differentiate Snow Peak’s products from its competitors’ and lead to support from core customers.

Snow Peak’s products are designed to be part of larger systems and complement other products, stimulating demand.

User-driven development, leveraging Tsubame-Sanjo metalworking techniques

Shared Research believes Snow Peak differentiates its products through product development and manufacturing.

Product development managers are camping enthusiasts.
They reference their experiences to oversee (from planning and design through production) development of products they would use.
Products are repeatedly tested in actual conditions.
Most manufacturing is outsourced; company resources are concentrated on development.
The company leverages production expertise dating back to its founding and gained through in-house production.
It uses Tsubame-Sanjo metalworking techniques in production.

Sales through directly managed stores and distributors

Sales are mainly through distributors
Sales channels: directly managed stores, in-store format, shop-in-shop format
In principle, no discounting

Customers mainly in 30s and 40s. “Snowpeakers” (fans of Snow Peak products) make up 1/4 of sales

Snow Peak’s customers are typically in their 30s and 40s with children.
Roughly 6–7% of the company’s customers are platinum or black members (spend JPY300,000 or more on Snow Peak products per year) and account for 20–30% of sales.

Outdoor business (products)

Snow Peak develops, manufactures, and sells high-end camping items to car camping enthusiasts. Products include tents, tarps, sleeping gear (sleeping bags), fire pits (open-air grills), furniture (tables and chairs), kitchen systems, cookware (pots, cooking utensils), tableware (utensils), heaters (stoves), and lighting gear (lanterns).

Representative company products