[Translation]
Consolidated Business Results for the First Quarter of the Fiscal Year Ending March 31, 2025
[IFRS]
August 7, 2024 | ||||||
Listed Company: Wacoal Holdings Corp. | Stock Exchange: Tokyo | |||||
Code Number: | 3591 | (URL:https://www.wacoalholdings.jp/) | ||||
Representative: (Position) Representative Director, President and CEO | (Name) | Masaaki Yajima | ||||
For Inquiries: | (Position) Corporate Officer, Head of Corporate Planning Dept. | (Name) | Katsuya Hirooka | |||
Scheduled dividend payment start date: | - | Tel: +81 (075) 682-1010 | ||||
Supplementary materials regarding business results: | Yes |
Explanatory meeting regarding business results:Yes (for institutional investors, analysts and the press)
(Amounts less than 1 million yen have been rounded)
1. First Quarter of the Fiscal Year Ending March 31, 2025 (April 1, 2024 - June 30, 2024)
- Consolidated Business Results
(% indicates increase (decrease) from the corresponding period of the previous fiscal year) | |||||||||||||||
Revenue | Business | Operating | Profit Before | Profit | |||||||||||
Profit | Profit | Taxes | |||||||||||||
Millions of Yen | % | Millions of Yen | % | Millions of Yen % | Millions of Yen | % | Millions of Yen | % | |||||||
First Quarter | |||||||||||||||
ended June 30, | 46,462 | (4.8) | 1,561 | (34.2) | 3,206 | 17.6 | 4,268 | 6.6 | 3,017 | 4.6 | |||||
2024 | |||||||||||||||
First Quarter | |||||||||||||||
ended June 30, | 48,789 | (0.5) | 2,371 | (0.3) | 2,727 | 10.4 | 4,004 | 11.8 | 2,885 | 16.6 | |||||
2023 | |||||||||||||||
Profit Attributable | Total | Basic Earnings | Diluted Earnings | ||||||||||||
to Owners of | Comprehensive | ||||||||||||||
per Share | per Share | ||||||||||||||
Parent | Income | ||||||||||||||
Millions of Yen | % | Millions of Yen | % | Yen | Yen | ||||||||||
First Quarter | |||||||||||||||
ended June 30, | 3,038 | 6.8 | 6,598 | (50.1) | 55.18 | 54.95 | |||||||||
2024 | |||||||||||||||
First Quarter | |||||||||||||||
ended June 30, | 2,844 | 18.0 | 13,222 | 59.6 | 49.03 | 48.82 | |||||||||
2023 |
(Note) Business profit is calculated by subtracting cost of sales, and selling, general and administrative expenses from revenue.
- Consolidated Financial Condition
Equity Attributable to | Ratio of Equity | |||
Total Assets | Total Equity | Attributable to | ||
Owners of Parent | ||||
Owners of Parent | ||||
Millions of Yen | Millions of Yen | Millions of Yen | % | |
As of June 30, 2024 | 291,050 | 218,819 | 215,490 | 74.0 |
As of the end of Fiscal | 294,029 | 215,142 | 211,829 | 72.0 |
Year (March 31, 2024) | ||||
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2. Status of Dividends
Annual Dividend | |||||
End of First | End of Second | End of Third | Year-End | ||
Quarter | Quarter | Quarter | |||
Total
Yen | Yen | Yen | Yen | Yen | ||
Fiscal Year Ended March 31, 2024 | - | 50.00 | - | 50.00 | 100.00 | |
Fiscal Year Ending March 31, 2025 | - | |||||
Fiscal Year Ending March 31, 2025 | 50.00 | - | 50.00 | 100.00 | ||
(Estimates) | ||||||
(Note) Revision of estimated dividends announced | during the latest quarter: No |
3. Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2025 (April 1, 2024 - March 31, 2025)
(% indicates increase (decrease) from the previous fiscal year with respect to "Annual" and from the six-month period ended September 30, 2023 with respect to "Six-month Period Ending September 30, 2024")
Profit Before | Profit | Basic Earnings | ||||||||||
Revenue | Business Profit | Operating Profit | Attributable to | |||||||||
Taxes | Owners of | per Share | ||||||||||
Parent | ||||||||||||
Millions of Yen % | Millions of Yen % | Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | Yen | ||||
Six-month | ||||||||||||
Period Ending | 92,400 | (2.9) | 1,200 (68.6) | 2,200 | - | 3,300 | - | 2,200 | - | 39.96 | ||
September 30, | ||||||||||||
2024 | ||||||||||||
Annual | 183,000 | (2.2) | 200 (94.3) | 2,000 | - | 3,800 | - | 3,200 | - | 58.12 | ||
(Note) | Revision | of forecast of | consolidated business | results announced | during the latest | quarter: No |
*Notes
- Significant changes in scope of consolidation in the consolidated cumulative first quarter of the current fiscal year: None
- Changes in accounting policies and/or accounting estimates:
- Changes in accounting policies required by IFRS: None
- Changes in accounting policies other than (i) above: None
- Changes in accounting estimates: None
- Number of Issued Shares (Common Stock)
First Quarter ended | Fiscal Year ended |
June 30, 2024 | March 31, 2024 |
- Number of issued shares (including
treasury stock) as of the end of: | 55,500,000 shares | 61,000,000 shares |
- Number of shares held as treasury
stock as of the end of: | 439,446 shares | 5,931,669 shares |
- Average number of shares during
consolidated first quarter (first | 55,057,323 shares | 58,010,347 shares |
quarter ended June 30): |
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*Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None
*Cautionary Statement regarding Forecast of Business Results
(Cautionary note on forward-looking statements)
The forecast of business results is based on reasonable information we obtained as of the date hereof and, due to various risks, uncertainties and other factors arising in the future, actual results in the future may differ largely from the estimates set out in this document. For notes on conditions used for the forecast of business results and cautionary statements regarding forecast of business results, please see "1. Overview of Business Results - (3) Qualitative Information regarding Forecast of Consolidated Business Results" on page 9 of the attached materials.
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Table of Contents for Attached Materials | ||
1. | Overview of Business Results ----------------------------------------------------------------------------------------- | 5 |
(1) | Business Results Overview of the First Quarter -------------------------------------------------------------------- | 5 |
(2) | Financial Condition Overview of the First Quarter ---------------------------------------------------------------- | 8 |
(3) | Qualitative Information regarding Forecast of Consolidated Business Results -------------------------------- | 9 |
2. | Condensed Quarterly Consolidated Financial Statements and Accompanying Notes ------------------------- | 10 |
(1) | Condensed Quarterly Statement of Financial Position ----------------------------------------------------------- | 10 |
- Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly Consolidated
Statement of Comprehensive Income ------------------------------------------------------------------------------ | 12 | |
(3) | Condensed Quarterly Consolidated Statement of Changes in Equity ------------------------------------------ | 14 |
(4) | Condensed Quarterly Consolidated Statement of Cash Flows -------------------------------------------------- | 15 |
(5) | Notes to Condensed Quarterly Consolidated Financial Statements -------------------------------------------- | 16 |
(Segment Information) ----------------------------------------------------------------------------------------------- | 16 | |
(Notes on Going Concern) ------------------------------------------------------------------------------------------- | 17 |
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1. Overview of Business Results
- Business Results Overview of the First Quarter
- Performance Overview of the Three Months ended June 30, 2024
(Millions of Yen) | |||||
Previous Consolidated | Current Consolidated | Increased/(Decreased) from | |||
Cumulative First | Cumulative First | previous consolidated | |||
Quarter | Quarter | cumulative | |||
(From April 1, 2023 to | (From April 1, 2024 to | first quarter | |||
June 30, 2023) | June 30, 2024) | ||||
Amount | Amount | Amount | % | ||
Revenue | 48,789 | 46,462 | (2,327) | (4.8) | |
Cost of sales | 20,939 | 20,187 | (752) | (3.6) | |
Gross profit | 27,850 | 26,275 | (1,575) | (5.7) | |
Selling, general and administrative expenses | 25,479 | 24,714 | (765) | (3.0) | |
Business profit | 2,371 | 1,561 | (810) | (34.2) | |
Other income | 446 | 1,733 | +1,287 | +288.6 | |
Other expenses | 90 | 88 | (2) | (2.2) | |
Operating income | 2,727 | 3,206 | +479 | +17.6 | |
Finance income | 1,020 | 800 | (220) | (21.6) | |
Finance expense | 79 | 94 | +15 | +19.0 | |
Share of profit of investments accounted for using | 336 | 356 | +20 | +6.0 | |
equity method | |||||
Profit before taxes | 4,004 | 4,268 | +264 | +6.6 | |
Profit attributable to owners of parent | 2,844 | 3,038 | +194 | +6.8 | |
During the current consolidated cumulative first quarter (April 1, 2024 - June 30, 2024), our group has worked on initiatives to achieve our goals under the revised three-yearmedium-term management plan which will end in the fiscal year ending March 2026. With respect to our domestic business, we continued to promote cost structure reforms as a part of our business model reform project, and also launched a business process testing to introduce an appropriate in-store restocking system and a production system linked to sales conditions in order to build a new supply chain system that can flexibly provide products in response to changes in customer needs and market conditions. In addition, we have introduced a brand manager system starting from the current fiscal year to foster attractive brands with clear value propositions and to formulate measures to expand sales in the young, high premium and/or senior segments. In our overseas business, we continued to expand contact points with new customers using digital to achieve growth of our e-commerce business, and we also work on broadening our sales areas and channels in Europe. With respect to our business in China where sales remained sluggish, we have been aggregating sales channels to improve profitability. Besides, we also promoted our project to introduce return on invested capital ("ROIC") management with the aim of improving capital efficiency and strengthening business management functions, and conducted the sale of the Asakusabashi Building under our policy to promote asset-reduction strategy. Furthermore, we implemented specific measures aimed at improving mid- to long-term corporate value, including the introduction of the performance-linked stock compensation plan with respect to remuneration plans for our directors, in order to improve the linkage of remuneration to business performance and to further share value with our shareholders.
As a result of the above, for the current consolidated cumulative first quarter, consolidated revenue was
46.46 billion yen (a decrease of 4.8% as compared to the corresponding period of the previous fiscal year). The decrease was mainly due to the impact of our domestic structural reforms (implementation of delivery adjustments to optimize the in-store inventory), in addition to the number of customers visiting retail stores falling below our expectations, while e-commerce business of our core operating entities remained strong. Consolidated business profit was 1.56 billion yen (a decrease of 34.2% as compared to the corresponding period of the previous fiscal year) due to the significant impact of decreased revenue and higher cost of sales ratio despite our efforts to control selling, general and administrative expenses at each operating entity. We recorded a consolidated operating income of 3.21 billion yen (an increase of 17.6% as compared to the corresponding period of the previous fiscal year) as a result of the gain from sale of property, plant and equipment (1.41 billion yen) related to the sale of the Asakusabashi Building. Consolidated profit before taxes was 4.27 billion yen (an increase of 6.6% as compared to the corresponding period
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of the previous fiscal year), and consolidated profit attributable to the owners of parent was 3.04 billion yen (an increase of 6.8% as compared to the corresponding period of the previous fiscal year).
The key exchange rates used for the current consolidated cumulative first quarter (the corresponding period of the previous fiscal year) were: 155.88 yen (137.37 yen) to the U.S. dollar; 196.85 yen (171.91 yen) to the Sterling pound; and 21.48 yen (19.56 yen) to the Chinese yuan.
- Business Overview of Our Reportable Segments
(Millions of Yen) | |||||||||
Previous Cumulative | Current Cumulative | Decreased from previous | |||||||
First Quarter | First Quarter | ||||||||
cumulative | |||||||||
(from April 1, 2023 to | (from April 1, 2024 to | ||||||||
first quarter | |||||||||
June 30, 2023) | June 30, 2024) | ||||||||
Amount | Distribution | Amount | Distribution | Amount | % | ||||
Ratio (%) | Ratio (%) | ||||||||
Total Revenue | 48,789 | 100.0 | 46,462 | 100.0 | (2,327) | (4.8) | |||
Wacoal Business (Domestic) | 23,774 | 48.7 | 22,237 | 47.9 | (1,537) | (6.5) | |||
Wacoal Business (Overseas) | 18,836 | 38.6 | 18,742 | 40.3 | (94) | (0.5) | |||
Peach John | 2,770 | 5.7 | 2,565 | 5.5 | (205) | (7.4) | |||
Other | 3,409 | 7.0 | 2,918 | 6.3 | (491) | (14.4) | |||
Previous Cumulative | Current Cumulative | Increased/(Decreased) from | |||||||
First Quarter | First Quarter | ||||||||
previous cumulative | |||||||||
(from April 1, 2023 to | (from April 1, 2024 to | ||||||||
first quarter | |||||||||
June 30, 2023) | June 30, 2024) | ||||||||
Amount | % to Sales | Amount | % to Sales | Amount | % | ||||
Operating Profit /(Loss) | 2,727 | 5.6 | 3,206 | 6.9 | +479 | +17.6 | |||
Wacoal Business (Domestic) | 561 | 2.4 | 1,089 | 4.9 | +528 | +94.1 | |||
Wacoal Business (Overseas) | 1,887 | 10.0 | 2,101 | 11.2 | +214 | +11.3 | |||
Peach John | 134 | 4.8 | (7) | - | (141) | - | |||
Other | 145 | 4.3 | 23 | 0.8 | (122) | (84.1) |
- Wacoal Business (Domestic)
Our sales performance during the current consolidated cumulative first quarter showed a mixture of strong and weak sales trends, differing by brand and sales channel. While sales from "Synchro Bra Top" under our "Wing" brand, which was a key product we promoted and received positive feedback from a wide range of customers, exceeded our expectations as a result of the positive impact of our active promotion measures utilizing SNS, sales from brassiere, our main product line, remained sluggish especially in medium-priced products.
As for trends by sales channel, while our e-commerce sales maintained a high growth as a result of our aggressive promotion measures, sales from our retail stores, including department stores, mass retailers and our directly managed stores, remained weak due to missed sales opportunities resulting from product shortages as well as sluggish growth in the number of customer visits caused by a lack of high-profile products.
As a result of the above, revenue attributable to our "Wacoal Business (Domestic)" segment was 22.24 billion yen (a decrease of 6.5% as compared to such revenue for the corresponding period of the previous fiscal year), meeting our planned level. Operating profit was 1.09 billion yen (an increase of 94.1% as compared to such operating profit for the corresponding period of the previous fiscal year) due to the gain on sale of property, plant and equipment (1.41 billion yen) related to the sale of the Asakusabashi Building.
- Wacoal Business (Overseas)
Sales from Wacoal International Corp. (U.S.) fell below the level of the corresponding period of the previous fiscal year on a local currency basis due to the impact of business withdrawal of Intimates Online, Inc. ("Intimates Online"). Sales from Wacoal America, Inc. which distributes "Wacoal" brand, remained approximately at the same level as the level of the corresponding period of the previous fiscal year. This was mainly due to the sluggish sales from our retail stores caused by the restraint on purchases by certain wholesale stores, and the weak sales from our
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e-commerce business which were impacted by the sluggish customer visits, although sales of third-partye-commerce websites significantly exceeded such sales for the corresponding period of the previous fiscal year as a result of the positive impact of our aggressive advertising activities.
Sales from Wacoal Europe Ltd. fell below the level of the corresponding period of the previous fiscal year on a local currency basis due to the weak sales from the specialty stores and department stores in the United Kingdom and the United States, while sales from Europe, mainly in Germany and France, achieved growth. By items, while sales from our women's innerwear products were strong, sales from our swimwear products significantly fell below such sales for the corresponding period of the previous fiscal year, which drove down the overall sales.
While we engaged in promotional activities to improve customer visits both at our retail stores and e-commerce websites against the backdrop of the weak consumer spending, our business at Wacoal China Co., Ltd. continued to struggle as the number of customer visits remained sluggish.
As a result of the above-described factors, while revenue attributable to each core operating entity decreased on a local currency basis, revenue attributable to our "Wacoal Business (Overseas)" segment was 18.74 billion yen (a decrease of 0.5% as compared to such revenue for the corresponding period of the previous fiscal year), remaining at the approximately same level as the corresponding period of the previous fiscal year due to the depreciation of the Japanese yen against major currencies. Operating profit was 2.10 billion yen (an increase of 11.3% as compared to such operating profit for the corresponding period of the previous fiscal year) mainly due to the profit improvement following the business withdrawal of Intimates Online and the impact of the depreciation of the Japanese yen.
- Peach John
During the current consolidated cumulative first quarter, sales from third-partye-commerce websites continued to remain strong. Sales from both our e-commerce website and directly managed stores, however, fell below the level of the corresponding period of the previous fiscal year as our sales promotion activities, including campaigns featuring famous celebrities and the "30th Anniversary Project", failed to attract new customers and to improve purchase rate to the level we expected.
As a result of the above, revenue attributable to our "Peach John" segment were 2.57 billion yen (a decrease of 7.4% as compared to such revenue for the corresponding period of the previous fiscal year). We recorded an operating loss of 0.01 billion yen (as compared to 0.13 billion yen of operating profit for the corresponding period of the previous fiscal year) due to the impact of decreased revenue and rising prices of unit costs, despite our efforts to control selling, general and administrative expenses based on sales trends.
- Other
During the current consolidated cumulative first quarter, sales from Lecien Corporation increased because of the strong sales of its private brand products and embroidery products. Sales from Ai Co., Ltd. remained at the same level as the corresponding period of the previous fiscal year due to a strong demand for swimwear products. On the other hand, sales from Nanasai Co., Ltd. significantly decreased due to a weak number of orders received for interior design work business. As described in the "Notice Concerning Share Transfer Involving a Change in Consolidated Subsidiaries" (*) which we announced on May 15, 2024, Nanasai Co., Ltd. will be excluded from the scope of our consolidation following the share transfer, starting from the second quarter.
As a result of the above, revenue attributable to our "Other" business segment was 2.92 billion yen (a decrease of 14.4% as compared to such revenue for the corresponding period of the previous fiscal year). Operating profit significantly decreased to 0.02 billion yen (a decrease of 84.1% as compared to such operating profit for the corresponding period of the previous fiscal year) mainly due to the impact of the loss recorded at Nanasai Co., Ltd.
- Please see our press release "Notice Concerning Share Transfer Involving a Change in Consolidated Subsidiaries" announced on May 15, 2024:https://www.wacoalholdings.jp/en/ir/topics/files/wacoalholdingsnews20240515_6en.pdf
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(Reference) Revenue and Operating Profit/ (Loss) of Major Subsidiaries
Revenue
(Millions of Yen) | ||||||
Previous Cumulative | Current Cumulative | Increased/(Decreased) from | ||||
First Quarter | First Quarter | |||||
previous cumulative | ||||||
(from April 1, 2023 to | (from April 1, 2024 to | |||||
first quarter | ||||||
June 30, 2023) | June 30, 2024) | |||||
Amount | Distribution | Amount | Distribution | Amount | % | |
Ratio (%) | Ratio (%) | |||||
Wacoal Corp. | 22,552 | 46.2 | 20,959 | 45.1 | (1,593) | (7.1) | |
Wacoal International Corp. (U.S) | 7,857 | 16.1 | 7,939 | 17.1 | +82 | +1.0 | |
Wacoal Europe Ltd. | 5,551 | 11.4 | 6,164 | 13.3 | +613 | +11.0 | |
Wacoal China Co., Ltd. | 2,982 | 6.1 | 2,582 | 5.6 | (400) | (13.4) | |
Peach John Co., Ltd. | 2,770 | 5.7 | 2,565 | 5.5 | (205) | (7.4) | |
Lecien Corporation | 563 | 1.2 | 666 | 1.4 | +103 | +18.3 | |
Nanasai Co., Ltd. | 1,877 | 3.8 | 1,251 | 2.7 | (626) | (33.4) |
*Revenue from external customers only
(Millions of Yen) | |||||||||
Previous Cumulative | Current Cumulative | Increased/(Decreased) from | |||||||
First Quarter | First Quarter | ||||||||
previous cumulative | |||||||||
Operating Profit/(Loss) | (from April 1, 2023 to | (from April 1, 2024 to | |||||||
first quarter | |||||||||
June 30, 2023) | June 30, 2024) | ||||||||
Amount | % to Sales | Amount | % to Sales | Amount | % | ||||
Wacoal Corp. | 799 | 3.5 | 1,399 | 6.7 | +600 | +75.1 | |||
Wacoal International Corp. (U.S.) | 680 | 8.7 | 1,030 | 13.0 | +350 | +51.5 | |||
Wacoal Europe Ltd. | 628 | 11.3 | 642 | 10.4 | +14 | +2.2 | |||
Wacoal China Co., Ltd. | 15 | 0.5 | (83) | - | (98) | - | |||
Peach John Co., Ltd. | 134 | 4.8 | (7) | - | (141) | - | |||
Lecien Corporation | 46 | 8.2 | (1) | - | (47) | - | |||
Nanasai Co., Ltd. | 29 | 1.5 | (83) | - | (112) | - |
- Financial Condition Overview of the First Quarter
- Assets, Liabilities and Total Shareholders' Equity
Our total assets as of the end of the current consolidated first quarter were 291,050 million yen, a decrease of 2,979 million yen from the end of the previous fiscal year, mainly due to a decrease in cash and cash equivalents.
Our total liabilities were 72,231 million yen, a decrease of 6,656 million yen from the end of the previous fiscal year, mainly due to decreases in income taxes payable and trade and other payables.
Equity attributable to owners of parent was 215,490 million yen, an increase of 3,661 million yen from the end of the previous fiscal year, mainly due to an increase in exchange differences on translation of foreign operations resulting from the depreciation of the Japanese yen.
As a result of the above, ratio of equity attributable to owners of parent as of the end of the current consolidated first quarter was 74.0%, an increase of 2.0% from the end of the previous fiscal year.
- Cash Flows
Cash and cash equivalents as of the end of the current consolidated first quarter were 28,755 million yen, a decrease of 4,792 million yen from the end of the previous fiscal year.
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(Cash Flow Used in Operating Activities)
Cash flow used in operating activities was 1,117 million yen, as compared to cash flow provided by operating activities in the amount of 970 million yen for the corresponding period of the previous fiscal year, after adjustments to our net profit of 3,017 million yen for changes in assets and liabilities, depreciation, amortization, income tax expense and other items.
(Cash Flow Provided by Investing Activities)
Cash flow provided by investing activities was 415 million yen, as compared to cash flow used in investing activities in the amount of 1,756 million yen for the corresponding period of the previous fiscal year, due to sale of property, plant and equipment, despite payments into time deposits.
(Cash Flow Used in Financing Activities)
Cash flow used in financial activities was 4,220 million yen, an increase of 1,096 million yen as compared to the corresponding period of the previous fiscal year, due to repayments of lease obligations and dividends paid.
- Qualitative Information regarding Forecast of Consolidated Business Results
We have not revised our forecast of consolidated business results for the six-month period ending September 30, 2024 and the fiscal year ending March 31, 2025 since we announced such forecast on May 15, 2024.
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2. | Condensed Quarterly Consolidated Financial Statements and Accompanying Notes |
- Condensed Quarterly Statement of Financial Position
(Millions of Yen) | ||
Accounts | Previous Consolidated | Current Consolidated |
Fiscal Year | First Quarter | |
as of March 31, 2024 | as of June 30, 2024 | |
Assets | ||
Current assets: | ||
Cash and cash equivalents | 33,547 | 28,755 |
Trade and other receivables | 22,141 | 20,503 |
Other financial assets | 1,996 | 3,055 |
Inventories | 49,989 | 50,628 |
Other current assets | 4,225 | 4,568 |
Subtotal | 111,898 | 107,509 |
Assets held for sale | 239 | 4,292 |
Total current assets | 112,137 | 111,801 |
Non-current assets: | ||
Property, plant and equipment | 45,478 | 44,014 |
Right-of-use assets | 11,471 | 10,872 |
Goodwill | 11,805 | 12,561 |
Intangible assets | 11,890 | 11,619 |
Investment property | 2,839 | 2,736 |
Investments accounted for using equity method | 20,347 | 20,958 |
Other financial assets | 54,451 | 52,675 |
Retirement benefit assets | 18,795 | 18,859 |
Deferred income taxes | ||
3,995 | 4,162 | |
Other non-current assets | 821 | 793 |
Total non-current assets | 181,892 | 179,249 |
Total assets | 294,029 | 291,050 |
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