アンドエスティ HD announced that it expects net income to increase in the fiscal year ending February 2027, the first increase in three fiscal years. The company said it would review its ambitious target-setting and curb excessive discount sales, while keeping inventory under control and carrying out additional production focused on best-selling items 1–2 months later.
In its results for March–May 2026, the company reported a gross margin of 57.9%, an improvement of 1.3 percentage points year on year. However, through the fiscal year ended February 2026, it had failed to exceed its initial earnings plan for 2 consecutive fiscal years. Despite its multibrand strategy, increased discount sales repeatedly resulted in performance falling short of the initial plan. The company acknowledged that AI-based forecasting has limitations and that setting overly ambitious targets led to excessive inventory.
From the fiscal year ending February 2027, the company is seeking to correct course by changing its budgeting process. It will manage inventory more conservatively and shift to a model of carrying out additional production 1–2 months later based on best-selling items. It has launched initiatives to increase IP collaboration products available only at physical stores, with the aim of increasing customer traffic. Increasing funding for summer bonuses has also had a positive impact on frontline employee motivation. Operating profit is tracking above the initial plan.
While higher crude oil prices have pushed up raw material costs for clothing produced overseas, the impact of the weaker yen has been greater, driving up procurement costs. Price increases are not a priority, although the company has previously pursued appropriate price adjustments for brands where price increases were feasible.