ONWARD Holdings (8016) investor relations material

Executive summary

• H1 FY2027 net sales rose 4.3% to ¥117.525B; operating profit increased 7.0% to ¥6.139B, recurring profit 7.5% to ¥5.936B and net income 16.6% to ¥5.625B.

• Strategic-brand strength and lower SG&A ratio supported profit growth, partly offset by weaker gross margin from higher costs and inventory-optimization initiatives.

Financial highlights

• Q2 net sales were ¥54.1B, up 3.0% YoY; operating profit was ¥0.5B, up 28.5%, and net profit was ¥0.6B, up 5.6%.

• H1 gross profit was ¥64.006B, up 2.4%; SG&A rose 1.9% to ¥57.867B, while EBITDA increased 6.6% to ¥8.961B.

• H1 operating profit was ¥0.3B below the initial target; JOSEPH’s wider first-half loss left profit ¥0.4B below plan.

• Directly operated stores and other physical retail sales rose 8.2% to ¥50.4B; e-commerce sales increased 4.1% to ¥28.5B.

Outlook and guidance

• FY2027 forecast unchanged: net sales ¥247.0B (+4.3%), operating profit ¥12.8B (+10.3%), recurring profit ¥12.3B and net income ¥11.2B (+10.9%).

• FY EBITDA is forecast at ¥18.8B, up 9.3%; 2H forecasts are ¥129.5B sales, ¥6.7B operating profit, ¥5.6B net profit and ¥9.8B EBITDA.

• FY segment plans: Domestic Fashion sales +2.2%, profit +12.3%; Overseas Fashion +17.4%, +39%; total Fashion +4.1%, +13.6%.

• Wellness sales and profit are forecast to rise 8.8% and 8.4%; Corporate Design sales and profit are forecast to rise 1.3% and 9.8%.