PAL GROUP Holdings CO (2726) Q2 2024 earnings summary

Executive summary

• 1H FY2024 revenue and profit reached record highs as apparel demand recovered and 3COINS expanded; results exceeded the initial forecast and full-year guidance was raised.

• Apparel growth reflected stronger store and EC sales and better full-price sell-through; short-cycle merchandising supported inventory discipline and profitability.

Financial highlights

• Consolidated 1H revenue was ¥94,145 million, up 20.4% YoY; gross profit was ¥52,327 million, up 19.8%.

• Operating income rose 35.8% to ¥10,299 million; ordinary income rose 34.7% to ¥10,384 million; attributable net income rose 45.6% to ¥7,001 million.

• PAL and subsidiaries' standalone sales were ¥83,782 million, up 18.8%; operating income was ¥9,166 million, up 30.0%, and net income was ¥6,623 million, up 44.3%.

Outlook and guidance

• FY2024 guidance was raised to revenue of ¥184,270 million, operating income of ¥18,970 million, ordinary income of ¥19,140 million and net income of ¥12,450 million.

• Full-year guidance implies YoY increases of 12.0% in revenue, 19.9% in operating income, 19.2% in ordinary income and 25.1% in net income.

• 2H forecast remains unchanged; guidance incorporates 1H results, while utilities, raw materials, yen weakness and wage costs continue to pressure retail operations.

• FY-end store count is forecast at 972, a net increase of 25 from 927 at the prior year-end.