Wacoal Revenue Rises 8.8% on U.S. Deal, but Operating Profit Falls 91% Against a Prior-Year Property Sale

Two very different profit lines

Wacoal Holdings Corp. (TSE: 3591) published consolidated first-quarter results for FY3/2027 on August 10, 2026, covering April 1 to June 30, 2026 under IFRS. Revenue rose 8.8% to ¥48,905 million and gross profit 9.1% to ¥28,613 million, but selling, general and administrative expenses grew 13.4% to ¥27,035 million, leaving business profit — the group's preferred operating measure, gross profit less SG&A — down 34.3% at ¥1,578 million.

Operating profit tells a much more dramatic story, and a much less informative one. It fell 90.8% to ¥1,812 million, but that is arithmetic rather than trading: other income collapsed 98.3% to ¥296 million from ¥17,452 million, because the year-earlier quarter included a ¥16,762 million gain on the disposal of the New Kyoto Building and other fixed assets. Below that line, finance income of ¥1,012 million was 48.8% higher and the equity-method loss narrowed to ¥10 million from ¥97 million, giving pre-tax profit of ¥2,608 million (−87.0%) and profit attributable to owners of the parent of ¥1,553 million (−88.7%). Earnings per share were ¥31.41 against ¥266.25.

This is the first quarter reported under a new segment structure: Wacoal has regrouped its operating segments along supply-chain lines to support ROIC management, and has switched segment profit from operating profit to business profit. Prior-year figures have been restated on the new basis.

Overseas carries the group; Japan swings to a loss

The overseas Wacoal business was the engine, lifting revenue 23.3% to ¥22,735 million and business profit 10.1% to ¥1,785 million, and overtaking the domestic business in size for the first time at 46.5% of group revenue. Wacoal International in the United States grew revenue 34.3% to ¥8,900 million, helped by Glamorise Foundations — an e-commerce-led plus-size specialist acquired in April 2026 — and by a switch of its own web store to Shopify that improved conversion. Wacoal Europe grew 20.2% to ¥10,540 million as Bravissimo lapped the fire that cut its sales in June 2025.

Japan went the other way. Domestic Wacoal revenue slipped 2.0% to ¥21,817 million and the segment swung to a business loss of ¥275 million from a ¥604 million profit. E-commerce grew, both on Wacoal's own site and on third-party platforms timed to their promotional events, but physical stores struggled: customers scaled back promotional programmes, the quarter was cooler than a year earlier and typhoons disrupted trade. CW-X, the conditioning-wear brand, and the premium Yue line both grew, while the core WACOAL and Wing brands and AMPHI lagged. Profit was further depressed by the base effect of a one-off reversal of personnel costs booked a year earlier when the company abolished its flexible retirement-age scheme.

Peach John grew revenue 4.1% to ¥2,897 million on strong sales of its Nice Body Bra and non-wired staples, though heavier promotional spending cut business profit 36.4% to ¥7 million. The Other segment was broadly flat at ¥1,456 million with business profit of ¥29 million.

A weaker yen flatters the overseas line

Part of the overseas gain is translation. The quarter was converted at ¥159.49 to the U.S. dollar against ¥144.59 a year earlier, ¥213.97 to the pound against ¥193.01, and ¥23.43 to the yuan against ¥19.99. China Wacoal's reported revenue rose 10.3% to ¥2,003 million even though local-currency sales fell, as the company withdrew from unprofitable stores and its 618 shopping-festival campaign disappointed.

The balance sheet barely moved: total assets of ¥291,904 million were ¥411 million lower than at March 31, while equity attributable to owners of the parent rose ¥3,236 million to ¥212,834 million, lifting the ratio of parent-owner equity to total assets 1.2 points to 72.9%. Comprehensive income of ¥5,684 million was 65.6% lower than a year ago, but well ahead of the quarter's profit, reflecting currency translation gains on the overseas subsidiaries.

Guidance unchanged — and unusually low

Wacoal left the forecast in place: for the year to March 2027 it expects revenue of ¥187,600 million (+9.4%), business profit of ¥500 million, operating profit of ¥1,500 million (−92.5%), pre-tax profit of ¥2,600 million (−86.8%) and profit attributable to owners of ¥1,800 million (−86.3%), for earnings per share of ¥36.40.

The business-profit target is the striking one: at ¥500 million for the full year, it sits below the ¥1,578 million the group has already earned in the first quarter. That reflects both the heavy front-loaded investment the company is making under "Medium-Term Management Plan 2029" — including brand-building spend in the United States and the Melooop Lab research base opened in May 2026 to commercialise new materials technology beyond apparel — and the seasonal shape of an innerwear business whose costs sit unevenly across the year. The annual dividend forecast is unchanged at ¥100.00 per share, split evenly between interim and year-end payments.

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.