Wacoal Holdings (3591) Q1 2024 earnings summary

Executive summary

• Revenue for Q1 FY2025 was ¥46.5 billion, down 4.8% year-over-year and 2.0% below plan, mainly due to sluggish physical store traffic, domestic reforms, and the withdrawal of IO from the U.S. market.

• Business profit declined 34.2% year-over-year to ¥1.6 billion, missing plan by 17.8%, as cost controls could not offset lower sales and a higher cost of sales ratio.

• Operating profit rose 17.6% year-over-year to ¥3.21 billion, exceeding plan by 8.7%, driven by a ¥1.41 billion gain on the sale of the Asakusabashi Building.

• Profit attributable to owners of parent increased 6.8% to ¥3.04 billion.

• Initiatives included cost structure reforms, supply chain improvements, a new brand manager system domestically, and digital expansion overseas.

Financial highlights

• Gross profit ratio was 56.6%, down 0.5pt year-over-year and vs. plan, with gross profit at ¥26.28 billion.

• SGA ratio increased to 53.2%, up 1.0pt year-over-year.

• Total assets at quarter-end were ¥291.05 billion, down ¥2.98 billion from March 2024.

• Cash and cash equivalents decreased by ¥4.79 billion to ¥28.76 billion from the end of FY2024.

• Basic earnings per share increased to ¥55.18 from ¥49.03 year-over-year.

Outlook and guidance

• Full-year FY2025 revenue is forecast at ¥183.0 billion, down 2.2% from FY2024, with no revision to previously announced forecasts.

• Business profit for the full year is projected at ¥0.2 billion, a sharp decline from ¥3.5 billion in FY2024.

• Profit attributable to owners of parent is projected at ¥3.2 billion.

• Focus remains on business model reforms, cost structure improvements, and asset reduction as part of the medium-term plan.