Will the decline in businesswear customer traffic reverse in FY2027-H1?

The profitability of the businesswear segment deteriorated from revenue of ¥133.210 billion and segment operating profit of ¥7.807 billion in FY2024, to revenue of ¥133.109 billion and operating profit of ¥8.927 billion in FY2025, and revenue of ¥124.299 billion and operating profit of ¥5.183 billion in FY2026. In FY2026, revenue was only 93.4% of the previous fiscal year's level and operating profit 61.9%, making the segment the main driver of the group's lower revenue and profit.

In FY2027-Q1, the segment's revenue was also limited to ¥27.458 billion, or 97.6% of the year-earlier level, while segment operating profit and loss was a ¥199 million loss. The year-earlier period recorded segment operating profit of ¥230 million, so the deterioration in profit was greater than the decline in revenue. The company said that low temperatures and bad weather held back sales of core products and customer traffic. Next time, it will be necessary to confirm whether customer traffic recovers after these factors have subsided.

At the same time, the structural shift toward casualwear is progressing faster than expected, making the decline in customer traffic a major management issue. Men's suit unit sales in FY2026 were 955,000, or 91.1% of the previous fiscal year's level, while same-store sales were 95.8%. Even if price revisions and tighter discount controls support average selling prices and gross margins, continued declines in unit sales and customer traffic will make it difficult to offset the loss of sales scale and fixed costs through higher prices alone.

The FY2027 plan assumes same-store sales of 101.7% of the previous fiscal year's level, including 102.0% in the first half and 101.5% in the second half. Accordingly, in FY2027-H1, we will look for whether same-store sales approach at least 102.0%, whether customer traffic recovers to 100% of the year-earlier level, and whether unit sales or average selling prices drove sales. Without disclosure of cumulative first-half customer traffic, unit sales and average selling prices, it will be difficult to distinguish weather-related factors from structural market factors.