Sustained revenue growth in the Garment Business, with the recovery of company-wide operating profit the focus for FY2027-H1

Consolidated revenue for the first quarter of the fiscal year ending March 2027 was ¥18,958 million, up 11.8% year on year, while operating profit was ¥148 million, down 28.4%. The operating margin declined by approximately 0.43 percentage points, from approximately 1.21% in the year-earlier quarter to approximately 0.78%. By segment, revenue in the Garment Business was ¥16,585 million and segment profit was ¥1,278 million, up 16.2% and 47.1% year on year, respectively. Meanwhile, the Lamination Film Business reported revenue of ¥2,372 million and segment profit of ¥116 million, representing declines in both revenue and profit.

Sales in the Garment Business were 14.18 million units, up 12.0% year on year, representing progress of 20.3% against the full-year plan of 70 million units. Expanded production capacity and additional personnel in Vietnam, Indonesia and Bangladesh supported revenue growth, while upfront costs associated with adding production lines and productivity improvements still in progress at newly established lines weighed on operating profit. The company has not disclosed the amounts incurred by expense category within cost of sales and selling, general and administrative expenses, or utilization and productivity levels by line.

The full-year plan calls for revenue of ¥80,000 million and operating profit of ¥3,400 million. First-quarter progress was 23.7% and 4.4%, respectively. The H1 benchmarks of ¥40,000 million and ¥1,700 million are simple 50% reference points based on the full-year plan, not company targets adjusted for seasonality. Even so, operating-profit progress is substantially behind revenue progress, making the extent of the recovery in cumulative operating profit through the second quarter important in assessing the achievability of the full-year plan.

At the next earnings announcement, it will be necessary to check not only whether H1 sales in the Garment Business approach 35 million units, but also whether the increase in volume translated into higher segment profit. In particular, the key points will be whether upfront costs for the new lines have run their course, and how many millions of yen the post-expansion productivity gains and additional personnel contributed to operating profit. The first-quarter materials did not include the company’s own assessment against plan or a factor-by-factor profit bridge, so any additional disclosure in H1 will also be closely watched.