FY2024 Third Quarter Business
Results Presentation
February 9, 2024
Hello everyone. I'm Akira Miyagi, Director and Managing Corporate Officer of WACOAL HOLDINGS.
As I mentioned earlier, we have already disclosed an explanatory video, so I will give you a simplified version.
1. | FY2024 3Q(Oct-Dec) Financial Overview |
2
Page two. First, I would like to discuss business performance in the last three months.
Executive Summary for FY2024 3Q (Oct-Dec)
Revenue
46.3 billion yen
<YoY>-¥0.1billion(-0.3%)
<Revised plan difference>-¥4.2billion(-8%)<Initial plan difference>-¥6.5billion(-12%)
- Fall/winter sales were sluggish at all major companies, resulting in a
significant shortfall from the revised plan | (billion of yen) | |||||||
FY2024 | 1H | FY2024 3Q | ||||||
Results | YoY | Planning | Results | YoY | Revised plan | |||
difference | difference | |||||||
Wacoal business(Japan) | 47.3 | -1.6(-3%) | -3.9(-8%) | 25.3 | -0.5(-2%) | -1.6(-6%) | ||
Wacoal business(Overseas) | 35.0 | -0.06(-0.2%) | -2.8(-7%) | 15.3 | +0.6(+4%) | -2.3(-13%) | ||
Peach John business | 5.5 | -0.5(-9%) | -0.8(-12%) | 2.6 | -0.5(-15%) | -0.6(-20%) | ||
Other businesses | 7.3 | -0.2(-3%) | -0.4(-6%) | 3.2 | +0.3(+11%) | +0.4(+13%) | ||
Business Profit
1.1 billion yen
<YoY>+¥0.5 billion(+80%)
<Revised plan difference>+¥1.2 billion(ー) <Initial plan difference>-¥0.9 billion(ー)
- Exceeded plan due to cost reductions and delays in sales promotion expenses
(vs Revised plan Revenue -2.8 billion yen SGA -4.0 billion yen)
FY2024 | 1H | FY2024 3Q | |||||
Results | YoY | Planning | Results | YoY | Revised plan | ||
difference | difference | ||||||
Wacoal business(Japan) | 1.0 | -0.7(-42%) | -0.1(-11%) | 1.7 | +1.3(+394%) | +0.5(+48%) | |
Wacoal business(Overseas) | 2.3 | +0.5(+29%) | -0.3(-12%) | -0.3 | -0.8(ー) | +0.7(ー) | |
Peach John business | 0.3 | -0.6(-68%) | -0.3(-47%) | -0.03 | -0.1(ー) | -0.3(ー) | |
Other businesses | 0.2 | +0.2 | -0.01(-6%) | -0.2 | +0.08(ー) | +0.3(ー) | |
(returning to profit) | |||||||
Operating Profit
1.4 billion yen
<YoY>+¥7.2 billion(ー)
<Revised plan difference>+¥1.5 billion(ー) <Initial plan difference>-¥0.05billion(-3%)
- Impairment loss (¥10.1 billion) related to Wacoal International (U.S.) was recorded in the previous fiscal year
3
Next, page three. The business environment over the past three months has remained challenging both domestically and internationally, due in part to sluggish growth in personal consumption caused by inflation. As a result of weak fall and winter sales at all major companies, net sales fell 0.3% from the same period last year to JPY46.3 billion. We disclosed a revised sales forecast on November 9, which is 8% below the original plan. Business profit ended at JPY1.1 billion, well above the revised plan and over the same period of the previous year, as all the group companies worked to control SG&A expenses to absorb the impact of the revenue decline.
FY2024 3Q(Oct-Dec): Business Conditions at Major Subsidiaries(Japan)
Wacoal 3Q sales trend | vs FY2023 |
vs FY2020 |
Note: The graph shows the monthly figures before the adjustments in settling accounts. (Including internal sales Excluding the impact of change in revenue recognition)
120 | |||||||||
110 | 105 | 103 | 106 | 106 | |||||
100 | 97 | 93 | 94 | ||||||
88 | 89 | 91 | |||||||
90 | |||||||||
94 | 94 | ||||||||
77 | 90 | ||||||||
76 | |||||||||
80 | 86 | ||||||||
69 | |||||||||
65 | |||||||||
70 | |||||||||
60 | |||||||||
50 | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. |
Revenue (including internal sales, Excluding the impact of change in revenue recognition) | |||||||||
➢ vs FY2023 3Q -2% vs Revised plan -6% |
Peach John 3Q sales trend | vs FY2023 |
vs FY2020 |
Note: Graphs are monthly figures based on internal management of PJ (Japan)
120(Including internal sales, Excluding receiving shipping charges) | |||||||||
110 | 102 | 109 | 105 | 109 | 109 | ||||
116 | 99 | ||||||||
100 | |||||||||
90 | 96 | 96 | 98 | 82 | 99 | ||||
91 | 90 | 91 | |||||||
90 | |||||||||
80 | |||||||||
79 | |||||||||
81 | |||||||||
70 | |||||||||
60 | |||||||||
50 | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. |
Revenue (including internal sales)
➢ vs FY2023 3Q -13% vs Revised plan -20%
【Topics of FY2024 3Q】
- Same as in the first half, sales of high-end products have been strong, but sales of mid-range products have been sluggish
- Due to sluggish sales, returns increased to adjust in-store inventory
Store basis Sales by Channel(% Change)
department stores:-6%(vs FY2020 -22%) directly-managed stores:+3%(vs FY2020 -9%)
GMS, Supermarket:Wacoal -5%(vs FY2020 -9%) Wing -12%(vs FY2020 -12%) Own EC:+13%(vs FY2020 +86%)
【Topics of FY2024 3Q】
- Collaboration projects with famous celebrities remained weak
- Introduced a new membership system with increased incentives for premium customers
Sales by channel(Japan)
Own EC:-31%(vs FY2020 -11%)
Retail stores:-7%(vs FY2020 +5%)
Other EC:+21%(vs FY2020 +67%)
4
Please refer to page four. This section describes the business performance of our main subsidiaries. Wacoal showed a recovery in October, but sales remained weak in November and December due to continued struggles in sales of mid-range products as well as sluggish growth in the number of customers visiting stores affected by the warm winter. Note that the company ended the year 6% short of the revised plan.
Peach John's three-month sales fell far short of the revised target and came lower than the previous year's performance. We carried out a collaboration project featuring famed celebrities for the fall and winter sales seasons, however, we failed to achieve the expected results. Additionally, we had to delay resuming order-receiving operations for several days after the troublesome implementation of the new e-commerce platform.
FY2024 3Q(Oct-Dec): Business Conditions at Major Subsidiaries(US)
Wacoal America 3Q sales trend | vs FY2023 | IO Inc. 3Q sales trend |
vs FY2020 |
vs FY2023 vs FY2020
Note: The graph shows the monthly figures before the adjustments in settling accounts. (Including internal sales)
Note: The graph shows the monthly figures before the adjustments in settling accounts. (Including internal sales)
130 | 125 | ||||||||
120 | 116 | 116 | 118 | ||||||
114 | |||||||||
110 | 107 | 113 | |||||||
101 | 101 | ||||||||
110 | |||||||||
100 | 93 | 94 | 95 | 96 | |||||
90 | 93 | 98 | 94 | ||||||
80 | 87 | ||||||||
70 | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. |
【Revenue】 including internal sales, local currency basis | |||||||||
➢ vs FY2023 3Q +3% vs Revised plan -0.9% |
【Topics of FY2024 3Q】
- Proceed as per the revised plan due to the relaxation of purchase restraints by major customers
- EC sales in 3Q +11%
Store basis Sales by Channel(% Change)
Physical store:+2%
EC Total:+11%
(Own EC:+2% Department store EC:-8% dedicated EC:+58%)
5
171 | |||||||||
170 | |||||||||
136 | |||||||||
121 | |||||||||
120 | 106 | 103 | 99 | ||||||
83 | 85 | ||||||||
70 | 61 | 53 | 58 | 86 | 49 | ||||
48 | |||||||||
79 | |||||||||
67 | 69 | ||||||||
38 | |||||||||
20 | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. |
【Revenue】 including internal sales, local currency basis | |||||||||
➢ vs FY2023 3Q -40% vs Revised plan -65% |
【Topics of FY2024 3Q】
- Following the decision to exit the business, the focus shifted to reducing inventory sales through discount promotions from November onward, but the results fell far short of expectations
Sales by channel(% Change)
IO EC:-38%
Directly managed store:-36%
Wholesale:-49%
Next, page five. United States. Both brick-and-mortar stores and e-commerce remained strong, as purchase restraints eased at major clients, and the company landed the sales results close to the revised plan. On the other hand, sales of Intimates Online, Inc., hereafter referred to as IO, fell far short of expectations, despite efforts to sell down inventory through discount promotions since November in response to the decision to exit the LIVELY business.
FY2024 3Q(Oct-Dec): Business Conditions at Major Subsidiaries(Europe・China)
Wacoal Europe 3Q sales trend | vs FY2023 |
vs FY2020 |
Note: The graph shows the monthly figures before the adjustments in settling accounts. (Including internal sales)
Wacoal China 3Q sales trend |
Note: The graph shows the monthly figures before the adjustments in settling accounts. (Including internal sales)
vs FY2023 vs FY2020
140 | 137 | 140 | |||||||
124 | |||||||||
122 | |||||||||
116 | |||||||||
120 | 110 | 109 | |||||||
102 | 101 | 105 | |||||||
100 | 85 | 114 | |||||||
101 | 97 | ||||||||
93 | |||||||||
80 | |||||||||
86 | |||||||||
62 | |||||||||
60 | |||||||||
56 | |||||||||
40 | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. |
【Revenue】 local currency basis
- vs FY2023 3Q +1% vs Revised plan -12%
【Topics of FY2024 3Q】
- Sales stagnated in the UK and Europe in November and December
- Failed to cover the negative impact of the cyber incident occurred in September
Sales by area(% Change)
UK:-5% North America:-12% Europe:+23%
220 | 209 | ||||||||
200 | |||||||||
180 | |||||||||
160 | |||||||||
140 | 119 | ||||||||
120 | 95 | 90 | 99 | 92 | |||||
100 | 88 | 84 | 84 | ||||||
80 | 53 | 57 | |||||||
60 | |||||||||
70 | 71 | 64 | 60 | 63 | 60 | 63 | |||
40 | |||||||||
Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. | |
【Revenue】 | local currency basis・Figures for vs FY2020 are calculated based on monthly figures. | ||||||||
➢ vs FY2023 3Q -6% vs Revised plan -27% |
【Topics of FY2024 3Q】
- Sluggish growth in the number of customers visiting physical stores and struggles in EC continued
- 80% of the pre-COVID level was set as the revised plan, but remained at around 60%.
Sales by channel(% Change)
Real Stores:-0.3%(vs FY2020 -39%)
Other EC:-10%(vs FY2020 -45%) Own EC:+46%
6
Page 6. Wacoal Europe recovered from the cyber incident that occurred in September, but sales in the UK and Europe, the main marketplace, were sluggish from November onward, due in part to a decline in consumer confidence in the wake of high inflation. Sales for the three months were up only 1% over the same period last year, falling far short of the revised plan for growth.
Meanwhile, in October and succeeding months, Wacoal China aimed to reach 80% of its pre-pandemic level. However, sales fell far short of expectations due to a slow recovery in personal consumption. The customer traffic of brick-and-mortar stores showed sluggish growth due to the impact of reluctance to buy Japanese products after the release of treated water into the ocean. Additionally, competition in the e-commerce market intensified. I conclude my report on the business performance for the last three months.
2. | FY2024 3Q(Apr-Dec) Financial Overview |
7
Page seven. I will continue with my review of the financial results for the consecutive nine months of the fiscal year ending March 2024.
Executive Summary for FY2024 3Q (Apr-Dec)
Revenue
141.4 billion yen
<YoY>-¥2.5billion(-2%)
<Revised plan difference>-¥4.2billion(-3%)<Initial plan difference>-¥14.4billion(-9%)
- Domestic : Sales of mid-range products were sluggish due to an increase in selective consumption
- Overseas : Although the U.S. showed signs of recovery, the U.K., Europe, and China struggled
(billion of yen) | |||||
FY2024 3Q | YoY | Revised plan difference | |||
Wacoal business(Japan) | 72.6 | -2.1(-3%) | -1.6(-2%) | ||
Wacoal business(Overseas) | 50.3 | +0.5(+1%) | -2.3(-4%) | ||
Peach John business | 8.1 | -1.0(-11%) | -0.6(-7%) | ||
Other businesses | 10.5 | +0.09(+0.9%) | +0.4(+4%) | ||
Business Profit
5.0 billion yen
<YoY>-¥0.02billion(-0.4%)
<Revised plan difference>+¥1.2 billion(+30%) <Initial plan difference>-¥1.5billion(-24%)
- To absorb the impact of decline in sales and higher cost of sales ratio, each company controlled SG&A expenses
(billion of yen) | |||||
FY2024 3Q | YoY | Revised plan difference | |||
Wacoal business(Japan) | 2.6 | +0.6(+30%) | +0.5(+25%) | ||
Wacoal business(Overseas) | 2.0 | -0.2(-10%) | +0.7(+55%) | ||
Peach John business | 0.3 | -0.7(-74%) | -0.3(-57%) | ||
Other businesses | 0.06 | +0.3(returning to profit) | +3(-) | ||
Operating Loss
-2.0 billion yen
<YoY>-¥0.2 billion
<Revised plan difference>+¥1.5 billion <Initial plan difference>-¥7.8 billion
8
-
In the current fiscal year, impairment loss (¥7.4 billion) related to Wacoal International
(U.S.) was recorded due to IO's withdrawal from the LIVELY business and subsequent liquidation - In the previous fiscal year, a gain on sales of fixed assets (¥3.0 billion) was recorded as other profit and an impairment loss (¥10.1 billion) related to the U.S. business was recorded as other expenses
On page eight, Revenues amounted to JPY141.4 billion, down 2% from the same period last year. In Japan, although the e-commerce business remained strong, sales of midrange products in major channels such as mass merchandisers were sluggish due to increasing selective consumption. As for overseas markets, although a recovery in personal consumption was seen in the US from October onward, the UK, Europe, and China were sluggish due to weak consumer confidence. The operational profit was JPY5 billion. To compensate for the impact of lower sales and higher cost-of-sales ratio, all of the group companies concentrated their focus on curbing SG&A expenses. As a result, sales landed at about the same level as in the same period of the previous fiscal year.
Operating loss amounted to JPY2 billion due to the recording of an impairment loss related to the US business. Operating loss for the same period of the previous year was also an operating loss due to an impairment loss of JPY10.1 billion related to the US business, while a gain on sales of fixed assets of JPY3 billion was recorded. The reasons for the differences from the revised plan were discussed at the beginning of this report, so I will skip it.
Revenue and Business Profit for FY2024 3Q
(billions of yen)
*Wacoal Europe is calculated excluding brand amortization cost | ||||||||||||||||||||||
Revenue | YoY | Revised plan | Sales Profit ratio | FY2023 3Q | FY2024 3Q YTD result | SGA ratio | FY2023 | FY2024 3Q YTD result | ||||||||||||||
difference | YTD | 3Q YTD | ||||||||||||||||||||
Wacoal | -2.1 | -1.6 | Wacoal | 56.7% | 56.2% | -0.5pt | Wacoal | 54.9% | 53.5% | -1.4pt | ||||||||||||
business(Japan) | ||||||||||||||||||||||
Peach John Domestic | 64.9% | 61.4% | -3.4pt | Peach John Domestic only | 49.9% | 57.6% | +7.6pt | |||||||||||||||
Wacoal | ||||||||||||||||||||||
+0.5 | -2.3 | only | ||||||||||||||||||||
Wacoal International Corp. | ||||||||||||||||||||||
business(Overseas) | 48.0% | 47.4% | -0.6pt | |||||||||||||||||||
Wacoal International | ||||||||||||||||||||||
50.3% | 49.7% | -0.6pt | (U.S.) | |||||||||||||||||||
Peach John business | -1.0 | -0.6 | Corp. (U.S.) | |||||||||||||||||||
Wacoal Europe Ltd. | 46.6% | 49.5% | +2.9pt | |||||||||||||||||||
Wacoal Europe Ltd. | 58.8% | 58.1% | -0.7Pt | |||||||||||||||||||
Other businesses | +0.09 | +0.4 | ||||||||||||||||||||
Wacoal China Co., Ltd. | 78.0% | 73.0% | -4.9pt | |||||||||||||||||||
Wacoal China Co., Ltd. | 69.0% | 69.6% | +0.6pt | |||||||||||||||||||
Business Profit | YoY | Revised plan | ||||||||||||||||||||
difference | ||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||
Wacoal | +0.6 | +0.5 | ||||||||||||||||||||
61.8 | ||||||||||||||||||||||
business(Japan) | ||||||||||||||||||||||
Sales Profit ratio | SGA ratio | |||||||||||||||||||||
YoY | Wacoal | -0.2 | +0.7 | |||||||||||||||||||
56.3% | 52.8% | |||||||||||||||||||||
-0.4(-0.6%) | business(Overseas) | |||||||||||||||||||||
Revised plan | (YoY-0.5pt) | (YoY-0.5pt) | ||||||||||||||||||||
difference | (Revised plan difference | (Revised plan difference | Peach John business | -0.7 | -0.3 | |||||||||||||||||
141.4 | -1.4(-2%) | -0.3pt) | -1.2pt) | |||||||||||||||||||
Other businesses | +0.3 | +0.3 | ||||||||||||||||||||
YoY | SGA | |||||||||||||||||||||
-2.5 | 79.6 | 74.6 | ||||||||||||||||||||
(-2%) | ||||||||||||||||||||||
Revised plan | YoY | YoY | Business Profit ratio | |||||||||||||||||||
difference | -2.1 | -2.1(-3%) | ||||||||||||||||||||
3.5% | ||||||||||||||||||||||
-4.2 | (-3%) | Revised plan difference | ||||||||||||||||||||
(-3%) | Revised plan | (YoY±0pt) | ||||||||||||||||||||
-4.0億円(-5%) | (Revised plan difference | |||||||||||||||||||||
difference | +0.9pt) | YoY | ||||||||||||||||||||
-2.8 | -0.02(-0.4%) | |||||||||||||||||||||
(-3%) | 5.0 | Revised plan difference | ||||||||||||||||||||
+1.2(+30%) | ||||||||||||||||||||||
Revenue | Sales margin | Business Profit | ||||||||||||||||||||
9 |
Details from sales revenue to business profit. Revenues decreased by JPY2.5 billion versus the same period last year. To reiterate, sales remained sluggish due to the continued difficult consumption environment both in Japan and overseas. Profit on sales decreased by JPY2.1 billion due to lower sales and higher cost of sales ratio.
The following table shows the profit-to-sales ratios of major subsidiaries. Each company's profit-to-sales ratio has deteriorated due to soaring costs and write-downs. Business profit was at the same level as the same period of the previous year as a result of thorough cost control based on sales trends.
FY2024 3Q Profit impact items
- Operating profit/loss: In addition to the decrease in business profit, it was affected by an impairment loss of ¥7.4 billion related to the U.S. business
- Income before income taxes: Impacted by investment impairment* (-¥1.8 billion) in affiliated companies (Shinyoung Wacoal and Thai Wacoal)
Business Profit | Other income and |
expenses | |
5.0 | |
YoY | -7.0 |
-0.02 | |
(-0.4%) | |
Revised plan | YoY |
difference | -0.2 |
+1.2 | Revised plan |
(+30%) | |
difference | |
+0.4 |
Impairment loss on goodwill of Wacoal International due to withdrawal from the LIVELY business, etc. -7.4 Impact of withdrawal from PJ China business -0.2
Operating Loss
-2.0 | Finance income |
and costs | |
0.4 | |
YoY | YoY |
-0.2 | -1.6 |
Revised plan | Revised plan |
difference | difference |
+1.5 | +0.2 |
- Investment impairment: An impairment is recorded when the price per share of an investment in an affiliate falls below its book value under certain conditions.
(billions of yen)
Loss | Loss | Loss Attributable | ||
before tax | to Owners of Parent | |||
-1.6 | Income | -4.0 | -3.9 | |
tax expenses | ||||
YoY | YoY | YoY | ||
2.4 | -1.6 | |||
-1.8 | -1.7 | |||
Revised plan | YoY | Revised plan | Non-controlling | Revised plan |
difference | -0.07 | difference | interests | difference |
+1.8 | +1.1 | +1.1 |
Change | -0.005 |
+0.7 | |
Impairment loss on equity | |
method investments -1.8 | |
10 | ・Shinyoung Wacoal |
・Thai Wacoal |
Please refer to page 10. Breakdown of quarterly profit encompassing operational profit and other factors. Operating loss was JPY2 billion, partly due to an impairment loss on goodwill related to the US business. Profit before income taxes decreased by JPY1.6 billion versus the same period last year, mainly due to an operating loss and an impairment loss on equity method investments. As a result, net loss attributable to owners of the parent for the quarter was JPY3.9 billion, a decrease of JPY1.6 billion versus the same period last year.
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Wacoal Holdings Corporation published this content on 06 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 05:20:04 UTC.