H1 will test whether weak demand is putting more pressure on operating profit than the decline in sales.

Revenue in the first quarter of the fiscal year ending February 2027, covering 1 March to 31 May 2026, was ¥2,195.684 million, down ¥215.031 million from ¥2,410.715 million a year earlier. Operating profit also fell by ¥93.838 million, from ¥150.659 million to ¥56.821 million, resulting in a decline far greater than the 8.9% decrease in revenue. Ordinary profit was ¥74.238 million and net profit for the quarter was ¥45.675 million, both below the prior-year figures.

The company cited the diversification of officewear and unseasonable weather, as well as weak sales of made-to-measure suits, ready-made suits and cut-and-sewn apparel, and a reduction in products offered through e-commerce. Same-store sales were 92.0% of the prior-year level, while brick-and-mortar stores were at 97.9%. The store count at period-end was 114, up by 1 year on year, so the decline in revenue cannot be explained simply by a reduction in store numbers. Demand, product mix and sales-channel issues need to be assessed separately.

As the company operates a single apparel-sales segment, segment-level revenue and profit cannot be compared. In addition, revenue by category, sales volumes and the impact of discounts for suits, made-to-measure suits and cut-and-sewn apparel have not been disclosed. It is therefore not currently possible to quantify how much of the ¥215.031 million decline in Q1 revenue was attributable to weather, product demand or the reduction in e-commerce offerings.

In H1 of the fiscal year ending February 2027, we will check whether same-store sales recover from 92.0% to at least 100.0% year on year, and whether the company can maintain or improve its 2.6% operating margin. Additional disclosure of revenue or unit sales by product would make it easier to assess a recovery in suit demand. If revenue remains below the prior-year level and the operating margin falls below 2.6%, this would indicate that the company remains unable to offset insufficient demand through SG&A reductions alone.