FY2025 Third Quarter Business
Results Presentation
February 10, 2025
＜Securities Code：3591＞
I am Akira Miyagi, Director, Vice President, Executive Officer, and CFO of Wacoal Holdings Corp.
I will now present the financial results for Q3 the fiscal year ending March 31, 2025 using the presentation document.
CONTENTS | |||
1. | FY2025 3Q Financial Overview | ・・・P.3 | |
2. Finance and Shareholder Returns | ・・・P.17 | ||
3. | Progress of Revised Medium-Term | ・・・P.20 | |
Management Plan | |||
• Initiatives at Wacoal Holdings Corp. | ・・・P.22 | ||
(Overseas Business) | |||
• | Initiatives at Wacoal Corp. (Domestic Business) ・・・P.26 | ||
4. | Reference data | ・・・P.33 | |
2 |
Here is today's agenda.
I am taking part in discussing the overview of the financial results for Q3 of the fiscal year ending March 31, 2025, as well as the financial and shareholder returns. Mr. Yajima, President of Wacoal Holdings, and Mr. Kawanishi, President of Wacoal Corp., will discuss the progress of the revised mid-term management plan that was announced in November 2023.
1. | FY2025 3Q Financial Overview |
2. Finance and Shareholder Returns | |
3. | Progress of Revised Medium-Term |
Management Plan | |
• Initiatives at Wacoal Holdings Corp. | |
(Overseas Business) | |
• Initiatives at Wacoal Corp. (Domestic Business) | |
4. | Reference data |
3 |
First, I will give an overview of the Q3 results for the current fiscal year.
Executive Summary for FY2025 3Q (Apr-Dec)
Revenue
133.5 billion yen
YoY
-7.9 billion（-5.6%） Revised plan difference -1.5 billion（-1.1%）
Due to the planned revenue decrease in the domestic business from the revised medium-term management plan and sluggish performance in key countries, revenue fell below both the previous year and the revised plan
- Japan: Sales remained sluggish due to strategic store withdrawals, and delivery adjustments, as well as a decrease in customer numbers
- Unprofitable businesses: Revenue decreased by approx. ¥6 billion due to the stock transfer of Nanasaiand IO*'s business withdrawal from the U.S. business
*Intimates Online, Inc. Hereinafter referred to as IO.
Business Profit
1.4 billion yen
YoY
-3.5 billion（-70.9%） Revised plan difference +1.0 billion（+260.8%）
Despite the impact of decreased revenue, gross profit ratio improved from the previous year
Exceeded the revised plan due to domestic cost control
- Gross profit: Withdrawals of unprofitable businesses and strong performance in Europecontributed to an improved consolidated gross profit ratio
- Expenses: While advertisingcosts increased domestically, other cost controlswere successful
Operating Profit
11.1 billion yen
YoY
+13.1 billion（-)
Revised plan difference +1.1 billion（+10.8%）
Significantly exceeded the previous year due to the recording of gains on the sale of the Asakusabashi Building and the former Fukuoka Office site as "other income"
4
I will discuss the Q3 results, focusing on the differences from the same period last year and from the revised plan announced last November.
Please look at the first row. Revenue totaled JPY133.5 billion, which fell short of both the performance during the same period last year and the targets outlined in the revised plan. For the current fiscal period, sales revenue and earnings were adversely affected due to a planned reduction in sales resulting from the revised mid-term management plan measures we carried out in Japan. Additionally, there was a decline in customer traffic at physical stores in Japan, coupled with sluggish sales in key markets, including North America, Europe, and China.
The deconsolidation of domestic subsidiary NANASAI and the withdrawal of North America-based Intimates Online, Inc. from its business negatively impacted approximately JPY6 billion in sales across three consecutive quarters during Q1 through Q3.
Please look at the middle row. Business profit was JPY1.4 billion, which fell short of the same period last year. However, it landed higher than the targets set in the revised plan. Although the profit margin was lower than the same period last year due to the impact of lower sales and higher costs, the profit margin improved from the same period last year by addressing unprofitable businesses. In addition to the postponement of some expenses to a later date, business profit exceeded the revised plan due to the cost control we carried out mainly in Japan.
Please look at the bottom row. Operating profit was JPY11.1 billion, higher than both the same period last year and the targets set in the revised plan.
In accordance with the direction outlined in the asset-light strategy, we sold the Asakusabashi building in Q1, as well as the former Fukuoka business office site in Q2. As a result, operating profit exceeded the same period last year. Additionally, business profit swung upward, and the operating profit resulted in exceeding the targets set in the revised plan.
FY2025 3Q (Apr-Dec) Results
(Millions of yen) | |||||||
FY2024 3Q | FY2025 3Q | ||||||
results | ratio | results | ratio | YoY | revised plan | ||
progress ratio | |||||||
Revenue | 141,407 | 100.0% | 133,534 | 100.0% | 94.4% | 73.8% | |
Wacoal Business (Domestic) | 72,561 | 51.3% | 68,764 | 51.5% | 94.8% | 74.5% | |
Wacoal Business (Overseas) | 50,308 | 35.6% | 50,001 | 37.4% | 99.4% | 72.2% | |
Peach John Business | 8,066 | 5.7% | 7,846 | 5.9% | 97.3% | 71.7% | |
Other | 10,472 | 7.4% | 6,923 | 5.2% | 66.1% | 81.9% | |
Gross Profit | 79,561 | 56.3% | 75,420 | 56.5% | 94.8% | 74.2% | |
SG&A | 74,605 | 52.8% | 73,977 | 55.4% | 99.2% | 71.0% | |
Business Profit | 4,956 | 3.5% | 1,443 | 1.1% | 29.1% | - | |
Wacoal Business (Domestic) | 2,630 | 1.9% | -254 | -0.2% | - | - | |
Wacoal Business (Overseas) | 2,008 | 1.4% | 1,500 | 1.1% | 74.7% | 73.2% | |
Peach John Business | 257 | 0.2% | 33 | 0.0% | 12.8% | - | |
Other | 61 | 0.0% | 164 | 0.1% | 268.9% | - | |
Operating Profit | -1,981 | -1.4% | 11,075 | 8.3% | - | 230.7% | |
Profit Attributable to Owners of Parent | -3,903 | -2.8% | 9,086 | 6.8% | - | 201.9% | |
5
This section summarizes the Q3 results, YoY comparisons, and progress against the revised plan.
Sales revenue progressed at approximately 74% of the targets set in the revised plan. Operating profit and other profits showed outstanding progress, largely affected by the sale of the physical estate in H1 of the fiscal year.
Revenue and Business Profit for FY2025 3Q | *1: The gross profit ratio of Wacoal Europe for the current fiscal year includes the impact of the acquisition |
of Bravissimo | |
*2: The SG&A ratio for Wacoal Europe for both the current and previous fiscal year includes WEL brand |
amortization costs
Revenue | YoY | Revised plan |
difference | ||
Wacoal | -3.80 | -1.24 |
business(Japan) | ||
Wacoal | -0.31 | -0.20 |
business(Overseas) | ||
Peach John business | -0.22 | -0.15 |
Other businesses | -3.55 | +0.12 |
Gross Profit ratio | FY2024 3Q | FY2025 3Q Results | ||
ratio | ratio | change | ||
Wacoal | 56.2% | 55.7% | -0.5% | |
Peach John Domestic only | 61.4% | 58.3% | -3.1% | |
Wacoal International Corp. (U.S.) | 49.7% | 48.9% | -0.8% | |
Wacoal Europe Ltd. *1*2 | 58.1% | 59.9% | +1.8% | |
Wacoal China Co., Ltd. | 69.6% | 68.3% | -1.2% | |
SCA ratio | FY2024 3Q | FY2025 3Q Results | |
ratio | ratio | change | |
Wacoal | 53.5% | 55.8% | +2.3% |
Peach John Domestic only | 57.6% | 58.7% | +1.1% |
Wacoal International Corp. (U.S.) | 47.4% | 44.5% | -2.9% |
Wacoal Europe Ltd. *1*2 | 51.2% | 57.2% | +6.0% |
Wacoal China Co., Ltd. | 73.0% | 75.3% | +2.2% |
（Billions of yen）
133.5
YoY
-7.9（-5.6％）
Revised plan
difference
-1.5（-1.1％）
Revenue
Business Loss | YoY | Revised plan | ||||||||||||||||||
58.1 | difference | |||||||||||||||||||
Wacoal | -2.88 | +0.63 | ||||||||||||||||||
business(Japan) | ||||||||||||||||||||
YoY | SG&A ratio | |||||||||||||||||||
Wacoal | -0.51 | +0.20 | ||||||||||||||||||
-3.7（-6.0％） | Gross Profit ratio | business(Overseas) | ||||||||||||||||||
55.4% | ||||||||||||||||||||
Revised plan | 56.5% | Peach John business | -0.22 | +0.08 | ||||||||||||||||
YoY+2.6％ | ||||||||||||||||||||
difference | YoY +0.2％ | Revised plan | Other businesses | +0.10 | +0.13 | |||||||||||||||
+0.1（+0.2％） | Revised plan difference -0.6％ | difference -1.4％ | ||||||||||||||||||
Business Profit ratio | ||||||||||||||||||||
75.4 | 7.40 | 1.1% | ||||||||||||||||||
YoY-2.4％ | ||||||||||||||||||||
Revised plan difference +0.8％ | ||||||||||||||||||||
YoY | YoY | YoY | ||||||||||||||||||
-4.1（-5.2％） | -0.6（-0.8％） | -3.5（-70.9％） | ||||||||||||||||||
Revised plan | Revised plan | Revised plan | ||||||||||||||||||
difference +1.0 | ||||||||||||||||||||
difference | difference | （+260.8％） | ||||||||||||||||||
-1.6 （-2.1％） | -2.7（-3.5％） | |||||||||||||||||||
1.4 | ||||||||||||||||||||
Cost of sales | Gross Profit | SG&A expenses | Business Profit | 6 | ||||||||||||||||
The next is a summary of the Q3 results.
The waterfall chart demonstrates the progression from sales revenue to business profit. Revenue, on the far left, JPY133.5 billion as mentioned earlier, was lower than both the same period last year and the targets set in the revised plan.
For a breakdown of the differences between the same period last year and the revised plan by segment, please refer to the top left chart. The main factors for the decrease in sales from the previous year were the deconsolidation of NANASAI, which is categorized in the other segment, the withdrawal from the business of Intimates Online, which is categorized in the Wacoal overseas business, and the planned decrease in sales due to the revised mid-term management plan measures, which is categorized in the Wacoal domestic business.
Returning to the waterfall chart, please see sales profit in the middle. Sales profit was JPY75.4 billion. As with sales revenue, sales profit fell short of both the same period last year and the targets set in the revised plan. However, the profit margin reached 56.5%, 0.2 percentage point higher than in the same period last year.
The consolidated profit margin improved from the previous year, thanks to the strong performance of Wacoal Europe and the deconsolidation of NANASAI, with low-profit margins. Despite that, the external environment remained severe, and soaring costs hit our businesses both in Japan and overseas.
See the document again, the right side of sales profit. SG&A expenses totaled JPY7.4 billion, a reduction compared to the same period last year and the targets set in the revised
plan, but the SG&A-to-sales ratio rose 2.6 percentage points from the same period last year to 55.4% due to the impact of lower sales.
In the upper right-hand corner, the table shows the SG&A ratios of major subsidiaries. The SG&A ratios of major subsidiaries, except for Wacoal International in North America, are on an upward trend due to advertising spending as a part of investment strategy, along with onetime expenses associated with the acquisition of Bravissimo last September.
Please go back to the waterfall chart and look at the far right. As a result, business profit was JPY1.4 billion, lower than the same period last year but still above the targets set in the revised plan.
FY2025 3Q Profit impact items
➢ Operating Profit： Increased significantly compared to the same period of the previous year due
to the recording of gains on the sale of the Asakusabashi Building and former Fukuoka | |||||||||||||||||||||||||||
Office site | Due to increase in | ||||||||||||||||||||||||||
Current fiscal year: Gain on sale of Asakusabashi Building ¥1.4 billion | pretax profit | （Billions of yen） | |||||||||||||||||||||||||
Gain on sale of former Fukuoka Office site ¥7.7 billion | |||||||||||||||||||||||||||
Total ¥9.1 billion | |||||||||||||||||||||||||||
Previous fiscal year: Impairment loss ¥7.4 billion for U.S. business | 0.7 | YoY | |||||||||||||||||||||||||
YoY | +1.8 | ||||||||||||||||||||||||||
13.1 | |||||||||||||||||||||||||||
1.4 | +1.8 | Revised plan | |||||||||||||||||||||||||
9.6 | YoY | Revised plan | difference | ||||||||||||||||||||||||
+0.5 | |||||||||||||||||||||||||||
11.1 | -0.2 | difference | |||||||||||||||||||||||||
Revised plan | 0.0 | YoY | 4.2 | 0.1 | |||||||||||||||||||||||
YoY | difference | +14.7 | 9.0 | 9.1 | |||||||||||||||||||||||
+0.5 | YoY | ||||||||||||||||||||||||||
+16.6 | （－） | ||||||||||||||||||||||||||
YoY | -0.1 | ||||||||||||||||||||||||||
YoY | Revised plan | Revised plan | |||||||||||||||||||||||||
+13.1 | Previous fiscal year: ¥1.3 billion | YoY | Revised plan | ||||||||||||||||||||||||
difference | |||||||||||||||||||||||||||
difference | |||||||||||||||||||||||||||
-3.5 | （－） | ||||||||||||||||||||||||||
+0.0 | investment impairment of | +1.3 | +12.9 | difference | YoY | ||||||||||||||||||||||
（-70.9％） | Shinyoung Wacoal, Korea | （+10.7％） | （ー） | +0.0 | +13.0 | ||||||||||||||||||||||
Revised plan | |||||||||||||||||||||||||||
（ー） | |||||||||||||||||||||||||||
Revised plan | difference | Revised plan | |||||||||||||||||||||||||
difference | +1.1 | ||||||||||||||||||||||||||
difference | Revised plan | ||||||||||||||||||||||||||
+1.0 | （+10.8％） | +0.9 | |||||||||||||||||||||||||
difference | |||||||||||||||||||||||||||
（+260.8％） | （+10.5％） | +0.8 | |||||||||||||||||||||||||
1.4 | （+10.1％） | ||||||||||||||||||||||||||
Business | Other income and | Operating | Finance income | Profit and loss | Profit before | Income | Profit | Non-controlling | Profit | ||||||||||||||||||
Profit | expenses | Profit | and costs | from equity | tax | tax expenses | interests | Attributable to | |||||||||||||||||||
method investments | Owners of Parent | ||||||||||||||||||||||||||
7 |
This waterfall chart illustrates the progress from business profit to quarterly profit attributable to owners of the parent company.
Business profit was JPY1.4 billion, as shown on the far left. By adding JPY9.6 billion of other profit and expenses, operating profit totaled JPY11.1 billion. Other profit mainly includes gains on sales of fixed assets associated with the sale of the Asakusabashi building in Q1 and the sale of the site of the former Fukuoka office in Q2.
After adding financial profit expenses and equity in earnings of affiliates to operating profit, profit before profit taxes was JPY13.1 billion, and after subtracting tax expenses, profit for the quarter was JPY9 billion.
Operating profit was much higher than in the same period last year as a result of the contribution of gains on sales of fixed assets and an upturn in business profit, which resulted in a landing above the targets set in the revised plan.
(Reference) FY2025 3Q Increase/Decrease in Revenue (YoY and vs the revised plan)
（Billions of yen）
141.4
Decrease vs FY2024 3Q
About a ¥ 7.9 billion
Short of FY2025 3Q revised plan
About a ¥ 1.5 billion
Previous year
IO's withdrawal | Weak performance in department stores, | ||||||||||||||||||||||||||||
from the | |||||||||||||||||||||||||||||
-4.0 | business,etc.-2.1 | malls/outlets, and third-party EC | |||||||||||||||||||||||||||
Weak performance in | |||||||||||||||||||||||||||||
FX | |||||||||||||||||||||||||||||
Wacoal and Wing brands | |||||||||||||||||||||||||||||
Bravissimo | Impacts | ||||||||||||||||||||||||||||
Japan | Other | Other | |||||||||||||||||||||||||||
-2.9 | |||||||||||||||||||||||||||||
3.4 | subsidiaries | subsidiaries | UK's slump | 135.0 | |||||||||||||||||||||||||
1.8 | -1.3 | -3.8 | FX | ||||||||||||||||||||||||||
and account | and account | ||||||||||||||||||||||||||||
Adjustments | Adjustments | ||||||||||||||||||||||||||||
-0.3 | Impacts | 1.0 | |||||||||||||||||||||||||||
US | China | -1.0 | 133.5 | 0.2 | Bravissimo | ||||||||||||||||||||||||
Europe | Other | -0.2 | 0.4 | 0.1 | 0.0 | -1.2 | 0.5 | 0.7 | Japan | ||||||||||||||||||||
(Excluding | overseas | Nanasai | PJ | US | |||||||||||||||||||||||||
Bravissimo) | Corporations | PJ | Nanasai | 0.1 | 0.1 | 0.0 | Europe | ||||||||||||||||||||||
Other | China | ||||||||||||||||||||||||||||
(Excluding | |||||||||||||||||||||||||||||
Acquired at the | overseas | Revised plan | |||||||||||||||||||||||||||
Current year | Bravissimo) | ||||||||||||||||||||||||||||
Corporations | |||||||||||||||||||||||||||||
end of September | |||||||||||||||||||||||||||||
2024 | G-Tech, Hong | Excluded from | Weak performance in | ||||||||||||||||||||||||||
consolidation | |||||||||||||||||||||||||||||
Kong Wacoal | |||||||||||||||||||||||||||||
after 2Q | department stores, | ||||||||||||||||||||||||||||
and others | |||||||||||||||||||||||||||||
business partner EC, | |||||||||||||||||||||||||||||
· Withdrawal of underperforming stores and | and own EC | ||||||||||||||||||||||||||||
delivery adjustment | |||||||||||||||||||||||||||||
· Impact of the closure of mass retailers | |||||||||||||||||||||||||||||
・Weak performance in Wacoal and Wing brands |
8
For reference, the waterfall chart displays the sales revenue of major group companies, comparing this year's results with both the results of the same period last year and this year's goal.
The chart from the left to the center of the slide shows the difference from the same period last year. From left to right, while sales in Japan, North America, and NANASAI were significantly impacted by the decline in sales from the previous year, the depreciation of the Japanese yen boosted sales.
The chart from the right to the center of the slide also shows the difference from the targets set in the revised plan. While right-to-left sales in Japan, North America, and Europe were lower than planned, foreign exchange effects boosted sales slightly.