Gunze Limited (TSE: 3002), the Japanese maker of innerwear and apparel, plastic films, and functional, medical, and electronic materials founded in 1896, reported consolidated full-year results for the fiscal year ended March 31, 2026 (FY3/2026) under Japanese GAAP. It was a weak year across the board: net sales fell 4.5% to ¥130,918 million, operating profit dropped 38.4% to ¥4,882 million, and ordinary profit fell 39.9% to ¥4,920 million. Net profit attributable to owners of the parent collapsed 91.9% to just ¥509 million from ¥6,279 million — far below ordinary profit, indicating large extraordinary and restructuring losses. During the year, Gunze deconsolidated two subsidiaries: Gunze Electronics USA Corp. and Tsuyama Gunze Co., Ltd. Basic EPS came in at ¥15.83 versus ¥189.70 in the prior year (post-split-adjusted).
Balance sheet stays strong despite the profit slump
Despite the sharp drop in earnings, Gunze's financial foundation remained robust. Total assets stood at ¥153,612 million and net assets at ¥113,746 million, leaving the equity ratio at a comfortable 72.8%. Book value per share was ¥3,565.39. Cash generation was healthy: operating cash flow rose to ¥17,271 million, against investing outflows of ¥11,585 million and financing outflows of ¥6,320 million, leaving cash and equivalents at ¥9,936 million at year-end.
Dividend held at ¥216, payout ratio above 1,300%
Gunze maintained a full-year dividend of ¥216.00 per share (an ordinary dividend of ¥147 plus a special dividend of ¥69) on a post-split basis. Against the depressed net profit, this pushed the FY26 payout ratio to an extraordinary 1,364.5%. The prior-year dividend of ¥390.00 was declared pre-split and is not directly comparable. For FY27, the company plans to keep the dividend at ¥216.00, which against guided earnings implies a far more normal payout ratio of 130.2%. A 1-for-2 stock split took effect on April 1, 2025, so all per-share figures above are presented on a post-split basis.
FY27 guidance points to a sharp rebound
Management guides for a steep recovery in the fiscal year ending March 2027 as the one-off restructuring charges drop out. The company forecasts net sales of ¥132,000 million (+0.8%), operating profit of ¥8,800 million (+80.3%), ordinary profit of ¥8,400 million (+70.7%), and net profit of ¥5,200 million — up 921.6%, or more than nine-fold from FY26's ¥509 million. Guided EPS is ¥165.90. With the deconsolidation of the US electronics operations and Tsuyama Gunze now complete, and the associated charges behind it, Gunze expects profitability to normalize sharply in the year ahead.
| Metric | FY3/2026 | YoY |
|---|---|---|
| Net sales (¥ million) | 130,918 | -4.5% |
| Operating profit (¥ million) | 4,882 | -38.4% |
| Ordinary profit (¥ million) | 4,920 | -39.9% |
| Net profit (¥ million) | 509 | -91.9% |
| EPS (¥) | 15.83 | — |
| Equity ratio | 72.8% | — |
| Annual dividend (¥) | 216.00 | — |
| FY27 net-profit guidance (¥ million) | 5,200 | +921.6% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.