Earnings recovery in the next fiscal year

「Revenue was ¥60,633 million, up 5.0% from the previous fiscal year, operating profit was ¥1,312 million, up 85.1%, ordinary profit was ¥1,358 million, up 71.7%, and net income attributable to owners of the parent was ¥1,107 million, up 44.0%. The company achieved results exceeding the targets set out in the “Revitalize Plan (Plan to Restore Profitability).”」

「We are currently working on the “Revitalize Plan (Plan to Restore a Profitable Business Structure)” to strengthen our earnings base. In particular, for our core wholesale business, we are working to establish a sales approach focused on profitability. To address the risk of higher costs resulting from yen depreciation and persistently high raw-material prices, we are also shifting production to Southeast Asia, utilizing tariff reductions and exemptions under RCEP (Regional Comprehensive Economic Partnership), and thoroughly reviewing ocean-transport methods and means. In addition, through projects aimed at restructuring businesses whose monetization is lagging, we are improving inventory turnover and reducing property-related expenses associated with the retail business, including e-commerce and store operations, with effects beginning to emerge in earnings.」

「In addition, the full-year benefits of fixed-cost reductions implemented in fiscal 2022, including a voluntary early retirement program, reductions in office space, and consolidation and closure of overseas locations, contributed throughout the year. Consequently, consolidated revenue declined 6.6% year on year to ¥57,736 million, while operating profit increased 650.5% year on year to ¥708 million.」

「As a result, revenue for the cumulative third quarter was ¥44,142 million, down 7.9% year on year, operating profit was ¥1,025 million, up 316.6%, ordinary profit was ¥1,121 million, up 140.3%, and net income attributable to owners of the parent was ¥1,112 million, up 579.7%.」

「Revenue for the cumulative second quarter of the current consolidated fiscal year was ¥26,717 million, down 6.3% year on year. Operating profit was ¥169 million, compared with an operating loss of ¥338 million in the same period of the previous year, ordinary profit was ¥249 million, compared with an ordinary loss of ¥119 million, and profit attributable to owners of the parent was ¥398 million, compared with a net loss of ¥466 million.」

「Against this backdrop, the company is implementing the “Revitalize Plan,” a 3-year plan covering fiscal 2022 through fiscal 2024. As a result, revenue in the cumulative first quarter of the current consolidated period remained broadly at the previous year’s level at ¥14,660 million, down 0.1% year on year. Along with an improved gross profit margin of 22.8%, up 4.0 percentage points year on year, operating profit was ¥415 million, compared with an operating loss of ¥87 million in the same period of the previous year, and ordinary profit was ¥446 million, an increase of ¥421 million year on year, marking a return to profitability.」

「In the current consolidated fiscal year, operating results turned profitable for the first time in 4 fiscal years, but the company recorded a full-year net loss attributable to owners of the parent.」

「As a result of these measures, revenue for the cumulative third quarter of the current consolidated fiscal year was ¥47,906 million, up 16.4% year on year. Although logistics and other costs increased with higher revenue, the gross profit margin improved to 18.9%, up 0.9 percentage points year on year. Operating profit was ¥246 million, compared with an operating loss of ¥920 million in the same period of the previous year, ordinary profit was ¥466 million, compared with an ordinary loss of ¥748 million, and quarterly net profit attributable to owners of the parent was ¥163 million, compared with a net loss of ¥987 million. This marked the first return to profitability in 6 quarters.」

「Although the first quarter did not produce sufficient results because sales recognized during the period consisted of orders received in the previous fiscal year with relatively low profit margins, revenue began to increase with improved margins from July onward. Forward orders received from September onward also exceeded the previous year, and signs of a bottoming out are beginning to emerge. In particular, the golfwear brand in the retail business has maintained a growth trend, with revenue up approximately 80% year on year, while fabric wholesale, primarily for European and US luxury brands, was up approximately 20% year on year. Both are beginning to drive the recovery in performance.」

「Revenue for the cumulative first quarter of the current consolidated period was ¥14,676 million, up 4.8% year on year, but the gross profit margin declined and the company posted an operating loss of ¥87 million, compared with operating profit of ¥126 million in the same period of the previous year.」

「Revenue for the current consolidated fiscal year was ¥56,572 million, up 13.0% from the previous fiscal year. However, the gross profit margin fell 2.8 percentage points to 17.3%, reflecting the significant impact of rapidly rising costs from the third quarter onward, including higher raw material prices, the weakening yen, higher ocean freight rates and increased processing fees at outsourced production plants.」

「In light of these circumstances, we will work to reduce fixed costs, including by further reducing head-office space and cutting rent through the relocation of the Tokyo branch, while accelerating priority initiatives and working to restore our earnings base.」

「Against this backdrop, we are pursuing the following priority measures for the current fiscal year: “recovery of the existing wholesale business,” “strengthening the retail business,” “planning and proposing distinctive product lines,” and “collaboration with companies in other industries.” Specifically, we are beginning to achieve results through total casualwear planning for women and men being developed with a major GMS, e-commerce sales of internally developed products, and coordination-planning initiatives using influencers with a major specialty-store chain. However, we believe that these efforts need to be strengthened further and that products capable of communicating shared values must be developed. Meanwhile, supported by increased sales of medical isolation gowns by an affiliated company and the addition of logistics operations from other companies, group revenue was ¥14,650 million, up 25.0% year on year; operating income was ¥124 million, compared with an operating loss of ¥173 million in the same period of the previous year; ordinary income was ¥195 million, compared with an ordinary loss of ¥142 million; and profit attributable to owners of the parent for the quarter was ¥132 million, compared with a loss of ¥249 million.」

「Order-taking and sales remained difficult for the company, resulting in revenue of ¥37,696 million, down 19.8% year on year. Operating loss was ¥543 million, compared with operating profit of ¥410 million in the same period of the previous year; ordinary loss was ¥399 million, compared with ordinary profit of ¥483 million; and the quarterly net loss attributable to owners of the parent was ¥710 million, compared with net profit of ¥383 million. Against this backdrop, the company views the cause of its current difficulties as a structural issue requiring more than a temporary response to external conditions. It is therefore reforming its entire sales process, including planning and proposing product lines from the consumer’s perspective that communicate their features and necessity, placing greater emphasis on materials and patterns for this purpose, and diversifying sales promotion methods.」

「The company also continued to face difficulties in order-taking and sales activities. As a result, revenue was ¥22,970 million, down 21.9% year on year, while operating loss was ¥699 million, compared with operating profit of ¥3 million in the same period of the previous year, ordinary loss was ¥632 million, compared with ordinary profit of ¥45 million, and quarterly net loss attributable to owners of the parent was ¥726 million, compared with profit of ¥80 million.」

「During the first quarter of the current consolidated cumulative period, the company implemented an organizational restructuring at the beginning of the period and adopted an age-segmented structure for both women’s apparel and baby and children’s apparel. It is reviewing the product planning and proposal process and working to strengthen its product planning capabilities with the involvement of outside specialists. However, the impact of requests to refrain from going out and shortened business hours and temporary closures at commercial facilities following the spread of COVID-19 was substantial. As a result, order-taking and sales activities became extremely difficult, and revenue was limited to ¥11,718 million, down 26.1% year on year.」

「In terms of earnings, operating profit was ¥410 million, up 6.7% year on year, and ordinary profit was ¥483 million, up 0.4%, owing to an improved gross profit margin, lower selling, general and administrative expenses, and contributions from affiliated subsidiaries. Profit attributable to owners of the parent was ¥383 million, compared with a net loss of ¥1,284 million in the same period of the previous year, when the company recorded an impairment loss of ¥1,376 million. Under its company-wide theme of “Back Home,” meaning a return to its roots, the company is working to improve its gross profit margin by securing appropriate margins for each customer, expand the planning of high-value-added product lines, and strengthen proposals. It will continue these initiatives and make every effort to restore its earnings power.」

「As a result, revenue for the cumulative second quarter was ¥29,404 million, down 9.0% year on year. Meanwhile, progress was made on the earnings front through improved product margins and lower selling, general and administrative expenses: operating profit was ¥3 million, compared with an operating loss of ¥121 million in the same period of the previous year, ordinary profit was ¥45 million, compared with an ordinary loss of ¥40 million, and quarterly net income attributable to owners of the parent was ¥80 million, compared with a net loss of ¥64 million. Going forward, under the theme of “Back Home (a return to our roots),” we will devote our full efforts to recovering sales, improving and strengthening earnings power, and proposing more high-value-added product lines.」

「Against this backdrop, the Company adopted “Back Home” (a return to its roots) as its company-wide theme and, to restore performance quickly, has been strengthening proposals by reviewing and developing high-value-added product lines, while securing appropriate profit margins for each product and customer.」

「At the same time, the company has established medium- to long-term goals including developing distinctive products using highly original company materials and in collaboration with external specialists, and considering new retail businesses, with the aim of restoring and strengthening earnings power over the medium to long term.」

「Revenue was ¥50,842 million, down 9.5% year on year, but due to improved gross profit margin and lower selling, general and administrative expenses, operating profit was ¥384 million, an increase of ¥752 million from the same period of the previous year, when the company recorded an operating loss of ¥368 million. Ordinary profit was ¥481 million, an increase of ¥764 million, compared with an ordinary loss of ¥282 million in the same period of the previous year. Going forward, under the theme of “Back Home” (a return to our roots), we will devote our full efforts to restoring and strengthening earnings power in the short and medium to long term by strengthening product planning capabilities, securing appropriate profit margins by product and customer, and stabilizing quality through collaboration with production partners, while also pursuing medium- to long-term goals such as developing distinctive products using the company's original materials and in collaboration with external specialists, and considering new retail businesses.」

「The operating loss was ¥121 million, compared with a loss of ¥817 million in the same period of the previous year, and the ordinary loss was ¥40 million, compared with a loss of ¥734 million. Although the losses narrowed, the company did not return to profitability. Going forward, under the theme of “Back Home” (a return to our roots), we will devote our full efforts to restoring and strengthening earnings power in the short and medium to long term by strengthening product planning capabilities, securing appropriate profit margins by product and customer, and stabilizing quality through collaboration with production partners, while also pursuing medium- to long-term goals such as developing distinctive products using the company's original materials and in collaboration with external specialists, and considering new retail businesses.」

「Revenue for the cumulative first quarter was ¥17,886 million, down 4.1% year on year, but improved gross profit margin and lower selling, general and administrative expenses resulted in operating profit of ¥443 million, compared with an operating loss of ¥93 million in the same period of the previous year, and ordinary profit of ¥472 million, compared with an ordinary loss of ¥45 million. Going forward, under the theme of “Back Home” (a return to our roots), we will devote our full efforts to restoring earnings power by developing trend-led products, determining appropriate profitability by product and customer, and stabilizing the production process and improving quality through collaboration with contract manufacturers.」

「Against this backdrop, we have established “Back Home” (a return to our roots) as the company-wide theme for this fiscal year and will focus on regaining our strengths.」

「Going forward, we will steadily translate our initiatives to restore current earnings power into results and devote our full efforts to earnings recovery.」

「Going forward, to support a recovery in performance next fiscal year, the company will further strengthen the review of its operations from the planning and proposal stages, which it began at the start of the fiscal year, while identifying the appropriate profitability of each product number and customer, and will work to improve its gross profit margin.」