(Filed Under Financial and General Interest News). First quarter sales at Wacoal International, the U.S. division of the Japan-based firm, fell 6%, while operating income dropped 10%. Meanwhile, for Wacoal globally, sales rose 1.4% and net jumped 59.6% for the three months ended June 30, 2018.

The declines at the U.S. division, which includes the Wacoal and b. tempt’d brands, were “due to a 7% decrease in the over-the-counter sales at department stores (actual shops), as well as the absence of the favorable effect of the initial product delivery from the increased number of department stores handling Wacoal brand products.” The company noted, however, that “e-commerce sales through our website and third-e-commerce websites increased by 8%.”

At the U.S. division, “Operating income on a local currency basis decreased by 10%” for the three months ended June 30, 2018 “due to decreased revenue, while the gross profit rate increased as a result of increasing the percentage of sales from our own e-commerce website and reducing discount sales.”

Meanwhile, at the company’s Wacoal Europe division, which includes such brands as Fantasie, Freya, Elomi and Goddess, sales on the local currency basis (Sterling pound) increased by 4%. “While sales in Eurozone area, such as France, Spain and Italy, were poor due to weak sales of the specialty stores, sales of our 2018 Spring/Summer collection in the United Kingdom and the United States, our major markets, were strong and increased by 12% and 7%, respectively, at department stores and through third-party e-commerce websites. Sales of our underwear and swimwear products under plus-size brand Elomi were strong with an increase of over 20% and our underwear products under Fantasie, Freya and Wacoal were also strong.”

The company continued that for the European division, operating income on a local currency basis increased by 39% “due to the reevaluation of suggested retail price in the United Kingdom and improved gross profit rate resulting from a change in the percentage of products and brands sold, in addition to the favorable effect of increased revenue.”

Globally, Wacoal reported first quarter net income of 6,289 million yen (about $55 million at current conversion rates) on sales of 49,373 million yen (about $434 million), compared to a profit of 3,941 million yen on sales of 48,674 million yen in the three months ended June 30, 2017. The company noted that the Japanese “domestic economy showed signs of mild recovery in consumer spending as the employment and income environment improved,” adding that “in China, consumer spending continued to contribute to the economic growth due to strong retail sales resulting from strong growth in the real per capital disposable income.” — NM

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Published 10-04-2018 by Nick Monjo