(Filed Under Financial and General Interest News). Sales at Wacoal dipped 1% for the fiscal year ended March 31, 2015, but net income attributable to Wacoal Holdings Corporation plummeted 16.4%. The company said the sharp decline in income was do to the decrease in sales and the “impact of impairment charges of 6,021 million yen [about $50.28 million] as a result of the reassessment of the fair value of our Peach John” catalog and online retail business.
Wacoal said that during the year, “sales from our overseas business [which includes the United States] were inflated by the sharp depreciation of the yen.” And it pointed out that in the U.S., “While sales at department stores continue to be weak, overall sales on a local currency basis exceeded the results for the previous fiscal year as a result of strong performance of our core brassieres products, the launch of our new Europe Collection in January, and expanding sales from internet sales and sales from our business in surrounding countries. In terms of profit, operating income exceeded the results for the previous fiscal year due to an increase in net sales.”
Interestingly, while its European and North American business remains only a small part of Wacoal’s overall sales, it has been growing over the past three years. For the year ended March 31, 2013 net sales for those regions totaled 22,229 million yen (about $185.61 million at todays exchange rate), or about 12.3% of Wacoal’s total business that year. For the year ended March 31, 2015, company sales in Europe and North America had risen to 32,254 million yen (about $269.32 million) and about $16.8% of Wacoal’s total sales. The company does not break out sales number for the United States alone.
For the most recent year, Wacoal reported net income of 8,444 million yen (about $70.51 million) on sales of 191,765 million yet (about $1.6 billion). The company explained, “overall sales fell below the results for the previous fiscal year due to a weak demand affected by pullbacks in consumer spending after the consumption tax increase [in Japan] and the influence of rising prices associated with the weakening yen.”
In the fiscal year ahead, Wacoal predicted “the management environment surrounding our group will continue to remain very difficult.” It added that in its Japanese “domestic business, we will observe changes in the market environment which is showing a recovery trend.”
“In our overseas business, we will work to strengthen the growth of our Wacoal brand business under the centralized system in Europe, and at the same time, we will seek to expand our market share in the high-end market in the United States and to establish a stable profit structure in China.”
Overall, Wacoal expects annual net sales to reach “205,000 million yen [$1.71 billion] (an increase of 6.9% as compared to the previous fiscal year)” and net income attributable to Wacoal Holdings Corporation of “10,000 million yen [about $84 million] (an increase of 18.4% as compared to the previous fiscal year).”
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