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Fiscal Year Ending March 31, 2019 1st Quarter Business Results Presentation
Wacoal Holdings Corp. August 2018
2
Changes to Accounting Policy Accompanying Revisions to Accounting Standards, etc.
●As of this year, we have reflected the following changes to our accounting policy in our consolidated financial statements. (1) We consider the amount expected to obtain through exchange of goods or services, in accordance with the contract with the customer, as revenue. (2) We have evaluated equity securities (excluding equity method investments and consolidated investments) with a fair value, and count the fluctuation in this value in net income and loss. With the application of these rules, other income and expenses in the consolidated income statement for the first quarter of this year include 3.2 billion yen in appraisal gains from equity securities. (3) Among the pension expenses and postretirement benefit expenses for the period, we post structural elements other than business expenses as other income and expenses. In order to backdate the application of these rules, we have reclassified 351 million yen of operating expenses as other income and expenses in the consolidated income statement for the first quarter of the previous year. *For details, see page 10 of the appendix of the summary of consolidated financial results.
Change % Change Difference % Difference
(% of net sales) (% of net sales) (% of net sales)
48,674 49,373 49,000 699 +1.4% 373 +0.8%
45.1% 44.3% 46.5%
54.9% 55.7% 53.5%
45.8% 46.8% 47.3%
9.1% 8.9% 6.1%
+58.1% 4,921 +123.0%
Net income attributable to
Wacoal Holdings Corp.3,941 6,289 3,000 2,348 +59.6% 3,289 +109.6%
Income Before Taxes 5,644 8,921 4,000 3,277
+3.7% -102 - 0.4%
Operating Income
(%)4,430 4,397 3,000 -33 - 0.7% 1,397 +46.6%
S, G&A Expenses
(%)22,277 23,098 23,200 821
-89 - 0.4% -922 - 4.0%
Gross Margin
(%)26,707 27,495 26,200 788 +3.0% 1,295 +4.9%
Consolidated net sales
Cost of Sales
(%)21,967 21,878 22,800
Compared with TargetFY2018 1Q
results,
3 months
FY2019 1Q
results,
3 months
FY2019 1Q
target,
3 months
Year on Year
3
Net sales: Up 1.4% Domestic : Exceeded regardless of the wholesale struggling from the stagnant sales of Wellness. Overseas: Favorable performance in China and Europe. Nanasai : Increase of large-scaled construction work. Operating income: Down 0.7% Domestic: Although there was a rebound to the loss of the compensation income marked during the same period of previous fiscal year, the sales profit ratio has improved, and profit increased by holding down sales administrative expense. Overseas: Positive impact of revenue growth PJ: Decrease of business efficiency Lecien : Negative impact of revenue decrease Income before taxes: Up 58.1% Appraisal gain on equity securities (+ ¥3.2 billion)
Financial Results Summary (Consolidated)
Exchange rates: USD = 109.07 yen, GBP = 148.55 yen, CNY = 17.05 yen
(Millions of yen)
4
Comparison Excluding Appraisal Profit on Equity Securities and Tentative Causes (Operating Income and Income Before Tax)
Operating income (excluding tentative causes)
実質的な 営業利益
3,637
4,397
793
2018年3月期第1四半期 2019年3月期第1四半期
Compensation income: ¥800
million
+20.9%
3,637
4,397
1,214
1,363
3,161
2018年3月期第1四半期 2019年3月期第1四半期
(Millions of yen)
Income before taxes (excluding tentative causes)
(Millions of yen) Appraisal gain on equity
securities: + ¥3.2 billion
Operating income
excludingtentative causes
Operating income
excludingtentative causes
+18.7%
FY2018 1Q FY2018 1Q FY2019 1Q FY2019 1Q
■Operating income excluding tentative causes and income before tax increased by 21% and 19%, respectively. Operating income excluding tentative causes: + 20.9% FY2019 1Q: ¥4.4 billion (same period in FY2018: ¥3.6 billion), + ¥800 million Income before taxes excluding tentative causes: + 18.7% FY2019 1Q: ¥5.8 billion (same period in FY2018: ¥4.9 billion), + ¥900 million
5
Net sales ¥27.48 billion -1.4%, - ¥400 million
Operating income ¥1.99 billion +2.4%, + ¥50 million
(Millions of yen)
By Operating Segment - Wacoal Business (Domestic)
Net sales: Wholesale decreased by 1% (Wellness struggling while inner wear remained strong) Retail sales increased by 5% Wholesale business: Department stores– Comfortable brassiere “GOCOCi” and “PARFAGE” for career women performed favorably⇧, but struggled in luxury lines⇩ General merchandise stores – “Wing” performed favorably due to an improvement in sales efficiency ⇧ and there were advance deliveries to prepare for the summer sales promotion within major general merchandise stores⇧ Other – Catalog business performed poorly⇩ and “CW-X” suffered sluggish sales in sports general merchandise stores⇩ Retail business: Both the existing product and the new product (Tube top type) in the “BRAGENIC” line among the brassiere category marked favorable results and there was an improved purchasing ratio among store visitors⇧ Ai: There was a decrease in demand among the young who are our main customers of young people, and highly competitive among
manufacturers entering the market for the first time and low price range products⇩ Operating income: Improved return on sales for both the wholesale and retail businesses, SG&A curbed⇧ Rebound from the loss of compensation income, due to the withdrawal from the factory site during the same period of previous fiscal year⇩
By Operating Segment - Wacoal Business (Overseas)
(Millions of yen)
Net sales ¥14.73 billion +2.6%, +¥380 million
Operating income ¥2.35 billion +6.3%, + ¥140 million
Net sales: EC sales continued to maintain to be in a favorable condition⇧ On the other hand, the sales within the department stores struggled, owing to the increase of shops in the department stores comparing to the same period over the previous fiscal year⇩ Operating income: Negative impact of revenue decrease⇩, but there was an improved gross profit rate due to an expansion in the sales component ratio of our EC site⇧ Net sales: Sales performed favorably in department stores and competitor’s EC in the U.K. and the U.S.⇧ “elomi” performed favorably in terms of both underwear and swimwear⇧ Operating income: Positive impact of revenue growth⇧ and improved gross profit rate due to a review of recommended retail prices⇧ Net sales: Sales increased due to a successful sales promotion measures in periods of demand such as the Lunar New Year and Women’s Day⇧, and an increase in competitors’ EC site sales⇧ Operating income: Increase in the EC sales ratio⇧, increase in the sales of the “Wacoal” brand⇧
U.S.
Europe
China
6
Year on
Year
Compared
with Target
Change % Change Difference % Difference Change Difference
Wacoal International Corp.
(U.S.)5,975 5,503 5,800 ▲ 472 ▲ 7.9% ▲ 297 ▲ 5.1% ▲ 6.2% ▲ 4.8%
Wacoal Europe Ltd. 3,672 3,990 3,900 318 +8.7% 90 +2.3% +3.9% +3.7%
Wacoal China Co., Ltd. 2,736 3,194 2,900 458 +16.7% 294 +10.1% +13.4% +8.1%
Wacoal International Corp.
(U.S.)1,325 1,169 1,160 ▲ 156 ▲ 11.8% 9 +0.8% ▲ 10.0% +2.1%
Wacoal Europe Ltd. 316 459 260 143 +45.3% 199 +76.5% +39.1% +78.8%
Wacoal China Co., Ltd. 341 516 370 175 +51.3% 146 +39.5% +47.2% +40.7%
Local Currency Basis
Year on Year Compared with Target
Net sales
Operating
income
FY2018
1Q results,
3 months
FY2019
1Q results,
3 months
FY2019
1Q target,
3 months
JPY Basis
Peach John Net sales ¥2.71 billion -1.9%, - ¥50 million
Operating income ¥55 million -75.2%, - ¥170 million
By Operating Segment - Peach John Biz, Other Biz.
7
Net sales: The domestic directly controlled EC site and directly managed stores are facing difficulties in achieving their sales. The sales growth within the Chinese market is slow⇩, but favorable performance in stores and our EC site in Taiwan⇧ Operating income: Negative impact of revenue decrease⇩, increased SG&A (e.g., advertising expenses and logistics expenses)⇩
Other Businesses Net sales ¥4.46 billion
+21.0%, +¥780 million Operating income ¥3 million
-94.5%, - ¥50 million
Lecien
Nanasai
Net sales: Decrease in private brand orders for general merchandise stores⇩, and a slump in art & hobby business and apparel business⇩ Operating income: Negative impact of revenue decrease⇩ and a rise in processing expenses in factories⇩ Net sales: Completion of construction work in the renovation of the main store in a major department store⇧ Countermeasures for the off-season has been successful⇧ Operating income: Positive impact of revenue growth⇧, but share of sales from construction business increased and return on sales decreased⇩
(Millions of yen)
Change % Change Difference % Difference
Peach John 3,028 2,978 3,200 -50 - 1.7% -222 - 6.9%
Lecien 2,442 2,038 2,200 -404 - 16.5% -162 - 7.4%
Nanasai 1,608 2,844 2,100 1,236 +76.9% 744 +35.4%
Peach John 222 55 130 -167 - 75.2% -75 - 57.7%
Lecien 102 -130 -90 -232 ー -40 ー
Nanasai -101 109 -20 210 ー 129 ー
Compared with Target
Net sales
Operating
income
FY2018 1Q
results,
3 months
FY2019 1Q
results,
3 months
FY2019
1Q target,
3 months
Year on Year
8
(Millions of yen)
Results by Segment
Difference
due to previous
FY rate
Difference
due to
current FY rate
Consolidated net sales 48,674 49,373 49,000 699 373 160 -42
Wacoal Business (Domestic) 27,877 27,478 28,000 -399 -522
Wacoal Business (Overseas) 14,353 14,728 14,000 375 728 161 -41
Peach John Business 2,759 2,707 3,000 -52 -293 -2 -1
Other Businesses 3,685 4,460 4,000 775 460 1
Operating income 4,430 4,397 3,000 -33 1,397 0 -8
Wacoal Business (Domestic) 1,947 1,994 1,300 47 694
Wacoal Business (Overseas) 2,206 2,345 1,500 139 845 3 -7
Peach John Business 222 55 100 -167 -45 -2
Other Businesses 55 3 100 -52 -97 -1 -1
Effect of Exchange Rate FluctuationsFY2018 1Q
results,
3 months
FY2019 1Q
results,
3 months
FY2019
1Q target,
3 months
vs. Prev.
FY
vs.
Target
List of the Major Subsidiaries’ Business Results in FY2019 1Q
*The figures given in each item are those before consolidation adjustment.
(Millions of yen)
9
Change % Change Difference % Difference Change % Change Difference % Difference
Wacoal 25,750 25,626 25,600 -124 - 0.5% 26 +0.1% 1,001 1,706 680 705 +70.4% 1,026 +150.9%
Peach John 3,028 2,978 3,200 -50 - 1.7% -222 - 6.9% 222 55 130 -167 - 75.2% -75 - 57.7%
Lecien 2,442 2,038 2,200 -404 - 16.5% -162 - 7.4% 102 -130 -90 -232 ー -40 ー
Nanasai 1,608 2,844 2,100 1,236 +76.9% 744 +35.4% -101 109 -20 210 ー 129 ー
Ai 1,207 921 1,100 -286 - 23.7% -179 - 16.3% -126 -181 -120 -55 ー -61 ー
Wacoal International Corp.
(U.S.)5,975 5,503 5,800 -472 - 7.9% -297 - 5.1% 1,325 1,169 1,160 -156 - 11.8% 9 +0.8%
Wacoal Europe Ltd. 3,672 3,990 3,900 318 +8.7% 90 +2.3% 316 459 260 143 +45.3% 199 +76.5%
Wacoal China Co., Ltd. 2,736 3,194 2,900 458 +16.7% 294 +10.1% 341 516 370 175 +51.3% 146 +39.5%
Wacoal Hong Kong Co., Ltd. 769 686 700 -83 - 10.8% -14 - 2.0% 86 76 50 -10 - 11.6% 26 +52.0%
Major Subsidiaries (Local Currency Basis) (USD1=JPY109.07, GBP1=JPY148.55, CNY1=JPY17.05, HKD1=JPY13.84)
Wacoal International Corp.
(U.S.)53,790 50,456 53,000 -3,334 - 6.2% -2,544 - 4.8% 11,917 10,721 10,500 -1,196 - 10.0% 221 +2.1% (USD'000)
Wacoal Europe Ltd. 25,858 26,862 25,900 1,004 +3.9% 962 +3.7% 2,225 3,094 1,730 869 +39.1% 1,364 +78.8% (GBP'000)
Wacoal China Co., Ltd. 165,113 187,276 173,200 22,163 +13.4% 14,076 +8.1% 20,564 30,270 21,510 9,706 +47.2% 8,760 +40.7% (CNY'000)
Wacoal Hong Kong Co., Ltd. 52,495 49,572 51,500 -2,923 - 5.6% -1,928 - 3.7% 5,839 5,533 3,900 -306 - 5.2% 1,633 +41.9% (HKD'000)
Compared with
Target
Net Sales Operating Income
FY2018 1Q
results,
3 months
FY2019 1Q
results,
3 months
FY2019
1Q target,
3 months
Year on Year Compared with Target FY2018 1Q
results,
3 months
FY2019 1Q
results,
3 months
FY2019
1Q target,
3 months
Year on Year
FY2019 2Q Targets for Major Subsidiaries
10
(Millions of yen)
Change % Change Change % Change
Wacoal 54,981 54,800 -181 - 0.3% 3,582 3,150 -432 - 12.1%
Peach John 6,250 6,600 350 +5.6% 394 310 -84 - 21.3%
Lecien 5,014 4,900 -114 - 2.3% 159 -10 -169 - 106.3%
Nanasai 4,098 4,600 502 +12.2% 86 100 14 +16.3%
Ai 3,986 4,300 314 +7.9% 8 270 262 +3,275.0%
Wacoal International Corp.
(U.S.)11,144 11,300 156 +1.4% 2,091 1,900 -191 - 9.1%
Wacoal Europe Ltd. 7,124 7,500 376 +5.3% 606 520 -86 - 14.2%
Wacoal China Co., Ltd. 5,442 6,000 558 +10.3% 457 490 33 +7.2%
Wacoal Hong Kong Co., Ltd. 1,566 1,500 -66 - 4.2% 161 120 -41 - 25.5%
Major Subsidiaries (Local Currency Basis) (USD1=JPY110.00, GBP1=JPY150.00, CNY1=JPY17.00, HKD1=JPY13.68)Wacoal International Corp.
(U.S.)100,336 102,500 2,164 +2.2% 18,834 17,240 -1,594 - 8.5% (USD'000)
Wacoal Europe Ltd. 49,605 50,300 695 +1.4% 4,220 3,460 -760 - 18.0% (GBP'000)
Wacoal China Co., Ltd. 331,974 350,200 18,226 +5.5% 27,885 28,520 635 +2.3% (CNY'000)
Wacoal Hong Kong Co., Ltd. 108,305 108,400 95 +0.1% 11,207 8,800 -2,407 - 21.5% (HKD'000)
Net Sales Operating IncomeFY2018
2QResults
FY2019
2QTarget
Year on Year FY2018
2Q Results
FY2019
2QTarget
Year on Year
*The figures given in each item are those before consolidation adjustment.
FY2019 2Q Wacoal Corporation Sales Plan by Division/Department
(Millions of yen)
11
Change % Change
Wacoal Brand Business 28,350 27,800 ▲ 550 ▲ 1.9%
Wing Brand Business 12,265 12,100 ▲ 165 ▲ 1.3%
Wellness Business 3,145 2,900 ▲ 245 ▲ 7.8%
Wholesale business subtotal 43,760 42,800 ▲ 960 ▲ 2.2%
Others (Intersegment transactions, etc.) 1,163 1,300 137 +11.8%
Wholesale business total 44,923 44,200 ▲ 723 ▲ 1.6%
Retail Business Div. 8,342 8,900 558 +6.7%
Web Sales Operation Dept. 3,555 3,800 245 +6.9%
Intersegment transactions, etc. eliminations ▲ 1,839 ▲ 2,100 ▲ 261 +14.2%
Total 54,981 54,800 ▲ 181 ▲ 0.3%
Net Sales of
Wacoal Corp.
FY2018
2QResults
FY2019
2QTarget
Year on Year
Information within this document with respect to business plans, forecasts, strategies and other
statements, including business performance figures, is based on Wacoal's assumptions in the
light of the information currently available, and in no way precludes the uncertainties and risks
inherent in these forward-looking statements. Furthermore, actual business results may, as a
result of numerous factors, differ significantly from those expressed in statements in this
document.
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