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Makita announced their latest financial reporting, which gives us an indication as to how Makita USA is doing.
Tool brands’ financial performance – their sales, revenue, and profit/loss figures – can give us clues as to their product development activities, promotions, risk, and pricing strategies.
Makita USA had company-wide layoffs in mid 2023, following several price increases over the span of two years.
The company tried new things for the 2023 holiday shopping season, such as introducing mail-in rebates. They also recently made a big announcement about their return as a Snocross team sponsor.
There were noticeably fewer Makita cordless power tool promotions over the 2023 holiday shopping season, compared to what we’ve seen in the USA in previous years.
Makita USA also seems to have made far fewer product announcements over the past few months than we’ve been accustomed to expect. They seem to have abandoned press releases entirely, choosing instead to simply announce to social media audiences about “more coming.”
Here are the latest numbers, for the 9-month period ending 12/31/23:
Makita North America
- Total Revenue: 75.165 billion Yen | $513 million USD*
- Operating Loss: 3.404 billion Yen | $23.2 million USD*
Makita Overall
- Total Revenue: 550.614 billion Yen | $3.75 billion USD*
- Operating Profit: 48.049 billion Yen | $328 million USD*
*Converted using 1/31/24 exchange rate of 146.64 Yen to $1 USD.
Makita said this about their performance in North America:
Sales, mainly at home improvement stores, were down 20.8% year on year
Makita reported an overall profit for the 12 months ending on 3/31/23 (FY 2023), but loss for their North America segment. It’s looking like they are on track for an overall profit in FY 2024 as well (ending 3/31/24), and an overall loss in North America unless they turn things around in a big way.
When we last reported about Makita’s 6-month performance ending 9/30/23 – Makita USA Faces Hard Times – their financials were in similar state.
Makita’s revenue overall and in North America increased for the period of October thru December 2023. Comparing the 9-month period ending 12/31/23 to the 6-month period ending 9/30/23, Makita’s North America segment profit changed from a 3.474 million JPY loss to a 3.404 million JPY loss.
By extrapolation, this suggests that for the period of October thru December 2023, Makita North America earned a profit of 70 million Yen, or ~$477 thousand.
Makita is reporting for their North America segment a $23 million* LOSS for the 9-month period ending 12/31/23, but at least they seem to have done a little better than breaking even for the October thru December 2023 holiday shopping season.
Objectively, an approximately $478 thousand profit on $164 million in added revenue for Makita’s North America segment, reflecting the currency-converted difference between 9-month (78.18 billion JPY) and 6-month figures (54.19 billion JPY), isn’t very good.
But, I would argue that a 0.3% profit for the holiday shopping season is definitely better than increased losses.
For the 9-month period ending 12/31/23, Makita’s North America segment contributed approximately 13.7% of the company’s total revenue. In this period, Makita reported an overall profit of ~$328 million, and loss for the North America segment of ~$23.2 million, with both figures converted from JPY.
How will this affect what products they choose to launch in the USA in 2024? Will Makita North America’s continued overall losses lead to more price increases?
It’s too soon to know if they’re an upwards track, and we also don’t know what changes have been brought about by the new President and CEO (Makita USA Announces a Major Change in Leadership).
