(Filed Under Financial and General Interest News). Wacoal Holdings Corp., the Japanese public company of which Wacoal America is a subsidiary, reported today a 2.6% increase in its consolidated sales for its first three quarters along with a 1.8% decrease in net income for the same period. It also revealed that both sales and income for the period were “less than initially expected” for Eveden Group Limited, which it purchased less than a year ago.
For nine months ending December 31, 2012, Wacoal sales were 135,547 million yen (about $1.488 billion compared to 132,057 million yen (about $1.449 billion) for the same period last year. Net income was 7,066 million yen (about $77.6 million) compared to 7,195 million yen (about $79.0 million).
In explaining these results in its reporting statement the firm noted, among other factors, that “overall sales increased as compared to the corresponding period of the previous fiscal year mainly due to the expansion of sales attributable to our businesses in the United States and China, and also due to the inclusion of the business results of Eveden Group Limited” which Wacoal purchased in April, 2012. “Operating income decreased as compared to the corresponding period of the previous fiscal year due to an increase in selling, general and administrative expenses of Wacoal Corp. and the impact of the lower profitability of our subsidiaries, despite our efforts to achieve efficiency through cost reduction and cutting expenses.”
Wacoal produces a wide variety of intimate apparel and other types of clothing and operates a variety of other businesses including food, textile and home furnishings. It also operates 155 retail stores internationally and, in addition to its domestic Japanese business segment and its Peach John retail and catalog operation, has an overseas segment (which includes the Wacoal USA subsidiary and elements of the Eveden Group). For the full fiscal year ended March 31, 2012 Wacoal’s sales were 171,897 million yen (or about $ 1.887 billion) and net income was about 6,913 million yen (or about $75.9 million).
Speaking of its operations outside of Japan, the firm stated, “we made aggressive efforts in expanding our U.S. market share and enhancing our product lineup mainly at department stores, which are our major clients, as well as in expanding our sales areas and channels. Sales exceeded the results for the corresponding period of the previous fiscal year as a result of steady performance generally shown by our core brassiere products, despite the impact of the aftermath of a big hurricane that struck the United States in October, and the strong performance of our internet sales and our business in Canada. With respect to profitability, operating income exceeded the results for the corresponding period of the previous fiscal year due to an increase in net sales. The exchange rate in the third quarter of the current fiscal year was 79 yen per dollar (compared to 78 yen per dollar for the corresponding period of the previous fiscal year).”
Wacoal noted disappointment with its new Eveden subsidiary, explaining “Sales from Eveden were less than initially expected due to the impact of the economic slowdown seen in European countries and currency fluctuations. With respect to profitability, operating income was less than initially expected due to reduced sales.”
It listed Eveden sales for the nine months as 19,209 million yen (or about $210.8 million) and operating income (not net income) of 955 million yen (or about $10.5 million). Last year Wacoal paid about $242 million to acquire Eveden.
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