World H1 Net Profit Rises 4% to ¥5.9 Billion as New Subsidiaries Offset a Weak Summer for Apparel

New subsidiaries carry the top line

World Co., Ltd. (TSE: 3612), the Kobe-based fashion group, reported consolidated first-half results for FY2/2027, the six months from March 1 to August 31, 2026, on October 5, 2026 under IFRS. The year is the first of its new medium-term plan, VISION-W, and the group has reorganised its reporting into B2C and B2B segments and adopted IFRS 18 early, restating the prior year on both counts. Revenue rose 4.1% to ¥142,489 million and gross profit 6.3% to ¥71,578 million, the gross margin widening to 50.2% from 49.2%, but selling, general and administrative expenses rose 7.1% to ¥63,220 million. Business profit, revenue minus cost of sales and SG&A and the company's preferred measure, edged up 0.3% to ¥8,358 million, and operating profit rose 1.2% to ¥8,409 million.

Profit before financing and income taxes fell 10.6% to ¥8,395 million because the prior year included a one-off gain on the valuation of an option over Right-on, then an equity-method affiliate, and pre-tax profit fell 13.9% to ¥7,234 million. Income tax nearly halved to ¥1,367 million from ¥2,673 million, helped by deferred-tax effects of a group reorganisation, and with Narumiya International and Right-on now wholly owned, almost no profit went to minority shareholders. Profit attributable to owners of the parent therefore rose 4.2% to ¥5,877 million. Earnings per share fell 6.8% to ¥77.11 because the average share count, adjusted for the two-for-one split on March 1, 2026, rose to 76.2 million from 68.2 million after shares were issued in share exchanges.

B2B grows profit, B2C stands still

The B2C segment grew revenue 8.2% to ¥108,403 million, but business profit was flat at ¥4,559 million. Right-on, consolidated last year, improved after restructuring and a merchandising overhaul, and World Style Labels, consolidated in March 2026, also contributed strongly, while the circular resale business kept growing; the core apparel brands, however, suffered from weak summer sales centred on June that wiped out the gains from more full-price selling and cost cuts. The B2B segment, which offers supply-chain, technology and staffing solutions to other companies, grew revenue 3.3% to ¥49,845 million and business profit 12.3% to ¥3,089 million, led by outside sales at MC Fashion and its Chinese subsidiary TCN, even as Life Gear Corporation and Asplund lost sales ahead of restructuring.

The corporate segment, which funds the holding company largely from management fees charged to subsidiaries, saw revenue slip 1.6% to ¥7,284 million and business profit fall 39.4% to ¥637 million, reflecting costs from the sale and leaseback of the Kobe head-office building, expanded shareholder perks and up-front investment in people and new businesses.

A leaner balance sheet

Total assets fell 4.6% to ¥267,228 million from February 28: trade receivables fell about ¥5.4 billion, right-of-use assets about ¥4.5 billion, cash about ¥2.1 billion and inventories about ¥1.6 billion, partly offset by about ¥2.0 billion from consolidating World Style Labels. Borrowings fell about ¥4.3 billion through repayments, and lease liabilities and trade payables also declined. Equity attributable to owners of the parent rose 5.4% to ¥99,772 million, lifting the ratio to 37.3% from 33.8%. The March 1 share exchange that made Right-on a wholly owned subsidiary added about ¥1.2 billion to capital surplus and cut non-controlling interests by the same amount.

Guidance unchanged, dividend up

World kept its FY2/2027 forecasts: revenue of ¥300,000 million (+5.6%), business profit of ¥18,500 million (+12.3%), operating profit of ¥17,500 million (+11.5%) and profit attributable to owners of the parent of ¥12,600 million (+4.9%), or ¥173.10 per share. Business profit is planned to rise sharply in the second half, to about ¥10,142 million. The company will pay an interim dividend of ¥31.00 and plans ¥36.00 at year-end, an annual ¥67.00 against a split-adjusted ¥54.50 last year.

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.