[Translation]
Consolidated Business Results for the First Quarter of the Fiscal Year Ending March 31, 2018
[U.S. GAAP]
July 31, 2017
Listed Company: Wacoal Holdings Corp.
Code Number: 3591
(URL: http://www.wacoalholdings.jp/)
Representative: Position: President and Representative Director
Name: Yoshikata Tsukamoto
For Inquiries: Position: General Manager of Corporate Planning
Name: Akira Miyagi

Stock Exchange: Tokyo

Tel: +81 (075) 682-1010

Scheduled quarterly report submission date:August 9, 2017
Scheduled dividend payment start date:
Supplementary materials regarding quarterly business results:
None
Explanatory meeting regarding quarterly business results:
None(Amounts less than 1 million yen have been rounded)

1.

First Quarter of the Fiscal Year Ending March 31, 2018 (April 1, 2017 – June 30, 2017)(1)

Consolidated Business Results(% indicates increase (decrease) from the corresponding period of the previous fiscal year)

Net Sales

Millions of Yen%

First Quarter ended
48,674
0.5
June 30, 2017
First Quarter ended
48,440(2.8)
June 30, 2016
(Note)
Quarterly comprehensive income:First Quarter ended
June 30, 2017
First Quarter ended
June 30, 2016
(2)

Operating Income

Income Before
Income Taxes andEquity in Net Incomeof AffiliatedCompanies

Net Income
Attributable to
Wacoal Holdings
Corp.

Millions of Yen

Millions of Yen

Millions of Yen

%

%

%

4,781

72.0

5,644

(18.0)

3,941(20.3)

2,780(37.3)

6,887

28.8

4,942

29.4

7,318 million yen (- %) for the first quarter ended
June 30, 2017
(3,631) million yen (- %) for the first quarter ended
June 30, 2016

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

28.73

28.64

35.13

35.03

Consolidated Financial Condition

As of June 30, 2017
As of the end of Fiscal
Year (March 31, 2017)

Total Assets

Total Equity(Net Assets)

Total
Shareholders’EquityTotal
Shareholders’Equity Ratio

Shareholders’Equity Per Share

Millions of Yen

Millions of Yen

Millions of Yen%

Yen

299,065

234,343

229,52876.7

1,676.34

294,958

232,482

227,56877.2

1,658.53

2.

Status of Dividends

End of First
Quarter
Fiscal Year Ended March 31, 2017
Fiscal Year Ending March 31, 2018
Fiscal Year Ending March 31, 2018
(Estimates)(Note)

3.

Annual Dividend
End of Second End of Third
Quarter
QuarterYear-End

Total

Yen

Yen

Yen

Yen

Yen

–
–

–

–

36.00

36.00

18.00

–

36.00

–

Revision of estimated dividends announced during the latest quarter: Yes
As we will conduct a share consolidation of common stock of Wacoal Holdings Corp. (“the Company”)
pursuant to which two (2) shares will be consolidated into one (1) share on October 1, 2017, please note thatsuch share consolidation is taken into consideration in determining the amount of the year-end cash dividend pershare for the fiscal year ending March 31, 2018 (estimates) mentioned above and the total annual dividend
amount is indicated as “–“. The year-end cash dividend per share and total annual dividend amount per share forthe fiscal year ending March 31, 2018 (estimates), without taking into consideration of the share consolidation,are 18 yen and 36 yen, respectively. For details, please see “Cautionary Statement regarding Forecast ofBusiness Results.”
Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2018 (April 1, 2017 - March 31,
2018)(% indicates increase (decrease) from the previous fiscal year)

Operating
IncomeNet Sales

Millions of Yen %Six-month Period Ending
September 30, 2017
Annual(Note)

Income Before
Income Taxes
Net Income
Net Income
and Equity in Net Attributable toAttributable to
Income of
Wacoal Holdings Wacoal Holdings
AffiliatedCorp.
Corp. Per Share
Companies

Millions of Yen % Millions of Yen %Millions of Yen %Yen103,000

0.6

8,300

5.2

9,000 (24.3)

6,200(32.6)

90.40

200,000

2.1

11,5003.9

12,500 (24.6)

9,000(28.1)

131.22

Revision of forecast of consolidated business results announced during the latest quarter: No
We will conduct a share consolidation of common stock of the Company pursuant to which two (2) shares will
be consolidated into one (1) share on October 1, 2017. Please note that such share consolidation is taken into
consideration in determining the amount of net income per share. For details, please see “Cautionary Statement
regarding Forecast of Business Results.”

Notes(1)

Changes in significant subsidiaries in the consolidated cumulative first quarter of the current fiscal year (i.e.
changes in specified subsidiaries (tokutei kogaisha) which involve change in scope of consolidation): None

(2)

Application of simplified accounting methods and specific accounting methods: None

(3)

Changes in accounting principles:(i) Changes due to modifications in accounting standards, etc.: Yes(ii) Changes other than (i) above: None
(Note) For details, please see “2. Consolidated Quarterly Financial Statements and Accompanying Notes (5)Notes to Consolidated Quarterly Financial Statements (Changes in Accounting Policy).”(4)

Number of Issued Shares (Common Stock)
First Quarter ended
June 30, 2017
(i)
(ii)
(iii)

Number of issued shares (including
treasury stock) as of the end of:
Number of shares held as treasury
stock as of the end of:
Average number of shares duringconsolidated first quarter (firstquarter ended June 30):

Fiscal Year ended
March 31, 2017

143,378,085 shares

143,378,085 shares

6,455,736 shares

6,167,211 shares

137,178,970 shares

140,661,785 shares*These quarterly financial statements are exempt from the review procedures.

*Cautionary Statement regarding Forecast of Business Results(Cautionary note on forward-looking statements)
The forecast of business results is based on reasonable information we obtained as of the date hereof and, due to various
risks, uncertainties and other factors arising in the future, actual results in the future may differ largely from the estimates
set out in this document.
(Forecast of dividends and consolidated business results after share consolidation)
As approved at the 69th Ordinary General Meeting of Shareholders held on June 29, 2017, we will conduct a shareconsolidation of common stock of the Company pursuant to which two (2) shares will be consolidated into one (1) share on
October 1, 2017. The forecast of dividends and consolidated business results for the fiscal year ending March 31, 2018
before such share consolidation is taken into consideration are as follows:
1. Forecast of dividends for fiscal year ending March 31, 2018
Interim dividend per share at the end of the second quarter:Year-end dividend per share:

18.00 yen (Note 1)
18.00 yen (Note 2)

2. Forecast of consolidated business results for the fiscal year ending March 31, 2018
Net income per share for six-month period ending September 30, 2017: 45.20 yen
Net income per share for fiscal year ending March 31, 2018:65.61 yen
(Note 1) The interim dividend at the end of the second quarter for the fiscal year ending March 31, 2018 shall be payablefor the shares prior to the share consolidation.
(Note 2) The dividend amount is calculated before the share consolidation is taken into consideration.
(Note 3) Annual dividend amount per share for fiscal year ending March 31, 2018 (before the share consolidation is taken
into consideration) is 36.00 yen.

Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the First Quarter ----------------------------- 2(1)

Qualitative Information regarding Consolidated Business Results ----------------------------------------------------- 2(2)

Qualitative Information regarding Consolidated Financial Condition -------------------------------------------------- 5(3)

Qualitative Information regarding Forecast of Consolidated Business Results --------------------------------------- 6

2.

Consolidated Quarterly Financial Statements and Accompanying Notes ----------------------------------------------- 7(1)

Consolidated Quarterly Balance Sheets ------------------------------------------------------------------------------------- 7(2)

Consolidated Quarterly Statements of Income ----------------------------------------------------------------------------- 9(3)

Consolidated Quarterly Statements of Comprehensive Income --------------------------------------------------------- 9(4)

Consolidated Quarterly Statements of Cash Flows ---------------------------------------------------------------------- 10(5)

Notes to Consolidated Quarterly Financial Statements ----------------------------------------------------------------- 11(Notes on Going Concern) --------------------------------------------------------------------------------------------------- 11(Notes on Significant Changes in the Amount of Total Shareholders’ Equity) -------------------------------------- 11(Changes in Accounting Policy) -------------------------------------------------------------------------------------------- 11(Segment Information) ------------------------------------------------------------------------------------------------------- 11(6)

Status of Sales ---------------------------------------------------------------------------------------------------------------- 12

-1-

1.

Qualitative Information regarding Consolidated Performance during the First Quarter(1)

Qualitative Information regarding Consolidated Business Results(i)Performance Overview of the Three Months ended June 30, 2017

During the current consolidated first quarter (from April 1, 2017 to June 30, 2017), consumer spending was notstrong due to factors such as concerns for social welfare in the future, while the domestic economy showed signs of a mild
recovery due to improvement in the employment environment and income. The environment surrounding women’s
innerwear market remained difficult, as consumers continued to be budget-conscious and a number of large-scale retailstores withdrew from the market. Overseas markets generally continued to show signs of a recovery: stable consumer
spending in the United States as a result of continued improvement in the employment environment; improvement in the
consumer sentiment in Europe due to recession of political risks; and a positive trend in retail sales after economic
slowdown in China has bottomed out.
In such an environment, our group continues to move forward with efforts to improve and strengthen our businessstructure toward achieving the objectives of our mid-term business plan. In our domestic business, we have been making
efforts to strengthen sales capabilities, to improve productivity, to realize omni-channel services that will achievesynergies with our wholesale business, to integrate core IT systems which will improve inventory efficiency, and to
improve profitability by updating each of our brands and product groups. In our overseas business, we began to implement
our initiatives to pursue business collaboration among Europe and America and Asian countries, strengthen our ability torespond to the e-commerce market, and improve product quality and cost competitiveness in China and ASEAN-member
countries where our product supply bases are located.
Consolidated sales from our domestic business for the current first quarter fell below such sales for thecorresponding period of the previous fiscal year due to weak sales of our wholesale business, which was impacted by aseries of closings of general merchandise stores and tighter management of inventories, while sales from our retail business
continued to be strong. On the other hand, our consolidated sales from our overseas business exceeded such sales for thecorresponding period of the previous fiscal year, as a result of sales in China due to the improved market condition, as wellas growing sales in the United States. As a result, consolidated sales improved slightly, an increase of 0.5% as compared toconsolidated sales for the corresponding period of the previous fiscal year.
Consolidated operating income significantly improved and increased by 72% as compared to consolidated
operating income for the corresponding period of the previous fiscal year, as a result of a cost rate decrease and the absenceof non-recurring expenses related to the liquidation proceedings for our French subsidiary that we recorded for thecorresponding period of the previous fiscal year, despite increases in selling, general and administrative expenses in ourdomestic business. On the other hand, consolidated income before income taxes and equity in net income of affiliatedcompanies fell by 18%, a significant decrease from that for the corresponding period of the previous fiscal year, due to theabsence of gain on sale of fixed assets (land) that we recorded for the corresponding period of the previous fiscal year.
The key exchange rates used for the current consolidated first quarter were: 111.09 yen to the U.S. dollar; 142.00
yen to the Sterling pound; and 16.57 yen to the Chinese yuan.
Net sales:

48,674 million yen(an increase of 0.5% as compared to the corresponding period of theprevious fiscal year)

Operating income:

4,781 million yen(an increase of 72.0% as compared to the corresponding period of theprevious fiscal year)

Income before income
taxes and equity in net
income of affiliatedcompanies:

5,644 million yen(a decrease of 18.0% as compared to the corresponding period of theprevious fiscal year)

Net income attributable to
Wacoal Holdings Corp.:

3,941 million yen(a decrease of 20.3% as compared to the corresponding period of theprevious fiscal year)

-2-

(ii)

Business Overview of Our Operating Segmentsa.

Wacoal Business (Domestic)

Wacoal Corp. reorganized its divisions, formerly called the Wacoal Brand Operation Division and Wing Brand
Operation Division, into the Wacoal Brand Operation Division, which is responsible for planning and development of“Wacoal” brand products and wholesale business mainly with department stores and specialty store channels, and theChain Store Operation Division, which is responsible for planning and development of “Wing” brand products andwholesale business with general merchandise stores.
Sales from our wholesale business, mainly composed of wholesale business from Wacoal Brand Operation
Division and Chain Store Operation Division, decreased by 3% as compared to such sales for the corresponding period of
the previous fiscal year. Sales of our specialty store channel were strong due to our successful initiatives to acquire a stablecustomer base for our “SALUTE” brand series. We were able to maintain sales at department stores at about the samelevel as such sales for the corresponding period of the previous fiscal year, as a result of strong sales of our core “LASEE”
products and strong sales of our “THINK SLEEPING” series sleepwear, which promote comfortable sleeping. Sales fromgeneral merchandise stores decreased from such sales for the corresponding period of the previous fiscal year due to weaksales of the “Wing” brand summer campaign brassieres and the effect of a series of closings of stores and tighter
management of inventories, while sales of “PULILI” products, our brand for junior generation, and sales of our “Wacoal”
brand brassieres were both strong.
In our retail business, sales of “BRAGENIC,” our cross-store common products, significantly expanded as a resultof our campaign initiatives. Overall sales, however, only increased by 1% as compared to such sales for the corresponding
period of the previous fiscal year due to a decrease in the number of buying customers, although average spending per
customer increased by reducing discounts at our core directly managed retail store, “AMPHI.”
Sales from our wellness business increased by 4% as compared to such sales for the corresponding period of theprevious fiscal year as a result of strong sales of our products under our core “CW-X” brand, particularly the functional
sport tights, at department stores and e-commerce managed by other companies, despite weak sales at sport specialty chain
stores, which were affected by the tighter management of inventories.
Overall sales from our Web sales business (formerly catalog sales business) only increased by 2% as compared tosuch sales for the corresponding period of the previous fiscal year due to a decrease in average spending per customer inour catalog sales business, while our webstore business was strong with a significant increase in the number of users who
visited our own e-commerce website.
Sales from Ai Co., Ltd. increased by 10% as compared to such sales for the corresponding period of the previous
fiscal year as a result of strong sales of our directly-managed flagship stores, strong sales from early openings of ourseasonal stores and growing sales through e-commerce managed by other companies in our swimwear business, althoughsales from the underwear business were weak due to the closure of underperforming stores and poor sales at stores in rural
areas.
As a result, sales attributable to our “Wacoal Business (Domestic)” segment decreased by 1% as compared to suchsales for the corresponding period of the previous fiscal year. Operating income resulted with an increase of 55% fromoperating income for the corresponding period of the previous fiscal year due to recognition of compensation income fromleaving a factory space occupied by our subsidiary, despite increases in expenses incurred for the commencement ofbusiness operations at the New Kyoto Building as well as increases in retirement benefit expenses and selling, general andadministrative expenses such as IT infrastructure related expenses.
Net sales:

27,877 million yen(a decrease of 1.2% as compared to the corresponding period of theprevious fiscal year)

Operating income:

2,298 million yen(an increase of 55.0% as compared to the corresponding period of theprevious fiscal year)b.

Wacoal Business (Overseas)

Overall sales on a local currency basis from Wacoal International Corp. (U.S.) increased by 20% as compared tosuch sales for the corresponding period of the previous fiscal year as a result of sales through our own e-commerce website,which increased by 30% as compared to such sales for the corresponding period of the previous fiscal year; sales-3-attributable to our wholesale business, which significantly exceeded such sales for the previous fiscal year, due to sales of
products sold for sales through e-commerce websites managed by department stores and other companies which increasedby 42% as compared to such sales for the corresponding period of the previous fiscal year; an increase in the number of
department stores handling Wacoal brand products; and the absence of the adverse impact of our pricing policy introducedin April 2016 that discouraged consumer spending. Although selling, general and administrative expenses increased inconnection with our initiatives to strengthen sales (including e-commerce sales), operating income on a local currency
basis increased by 70% as compared to operating income for the corresponding period of the previous fiscal year due to theimproved percentage of products sold at full price and an increase in the percentage of sales from our own e-commerce
website, as well as an increase in revenue.
With respect to sales on a local currency basis for Wacoal Europe, sales from our major business partners in the
United Kingdom continued to be steady and e-commerce sales in the North America were strong. Also, sales of ourplus-size brand “elomi” continued to achieve a high growth rate, with sales increasing by 32% as compared to such sales
for the corresponding period of the previous fiscal year, and sales of our swimwear products under “FANTASIE,” “Freya”
and “elomi” brands significantly expanded mainly in Europe and the North America due to the summer heat wave. As aresult, overall sales increased by 9% as compared to such sales for the corresponding period of the previous fiscal year.
Operating income for the current quarter has significantly improved as a result of the absence of the non-recurring
expenses related to the liquidation proceedings for our French subsidiary which we recorded during the corresponding
period of the previous fiscal year.
With respect to our business in China, sales of “Wacoal” brand products increased by 7% as compared to suchsales for the corresponding period of the previous fiscal year due to an increase in number of purchasers resulting from
openings of specialty stores at major department stores during China’s high-demand seasons such as the Chinese New
Year and International Women’s Day, in addition to strong sales of wire-free brassieres. Sales of our “Peach John” brandproducts significantly expanded, with an increase of 38% as compared to such sales for the corresponding period of theprevious fiscal year, as the number of users expanded, and as a result, overall sales were also strong, increasing by 7% fromsuch sales for the corresponding period of the previous fiscal year. Operating income on a local currency basis
significantly improved from the corresponding period of the previous fiscal year with an increase of 77% due to our efforts
to streamline store renovations and to reduce expenses by suspending openings of “La Rosabelle” brand stores.
As a result of the above, the overall sales and the operating income attributable to our “Wacoal Business(Overseas)” segment on the Japanese Yen basis significantly exceeded that for the corresponding period of the previous
fiscal year.
Net sales:

14,353 million yen(an increase of 10.2% as compared to the corresponding period of theprevious fiscal year)

Operating income:

2,206 million yen(an increase of 114.8% as compared to the corresponding period of theprevious fiscal year)c.

Peach John Business

Sales from our domestic directly-managed retail stores of Peach John Co., Ltd. located in the metropolitan area
continued to be strong for “Peach John,” “Yummy Mart” and “Salon by Peach John” brand products, and as a result, retailsales at stores expanded by 6% as compared to such sales for the corresponding period of the previous fiscal year. Also,
wholesale business significantly expanded, increasing by 35% from such sales for the corresponding period of the previous
fiscal year, as a result of strengthened initiatives with third-party e-commerce websites. On the other hand, our mail-ordercatalogue business was impacted after updating the minimum purchase amount for free shipping, and as a result, the sales
were weak due to a decrease in the number of purchasers, although average spending per customer increased. With respect
to sales from our overseas business, sales from Taiwan Peach John Ltd. of which we commenced our operations in May
significantly exceeded our initial plan.
As a result, overall sales increased by 2% as compared to such sales for the corresponding period of the previous
fiscal year. Operating income increased by 8% as compared to operating income for the corresponding period of theprevious fiscal year due to an increase in gross profit resulting from increased sales of products sold in China and Hong
Kong, in addition to an improvement in the gross profit rate from an increase in the percentage of sales from our innerwear
products.
Net sales:

2,759 million yen(an increase of 1.7% as compared to the corresponding period of the-4-

previous fiscal year)
Operating income:d.

222 million yen(an increase of 8.3% as compared to the corresponding period of theprevious fiscal year)

Other

With respect to Lecien Corporation (“Lecien”), although sales from “brassiere for school club activities”
campaign were strong, overall sales from our core innerwear business were weak as sales of other products were weak andthe number of orders received for our private brand products for sale at major general merchandise stores decreased.
Although sales from our art & hobby business were strong as a result of newly developed handcraft kits with the expansionof the C2C market, sales from our material business, which was impacted by a decrease in demand for garment laces, were
weak. As a result, overall sales decreased by 15% as compared to such sales for the corresponding period of the previous
fiscal year. Operating income significantly exceeded operating income for the corresponding period of the previous fiscal
year due to improvement in the gross profit rate resulting from changes in our product mix in our innerwear business, aswell as the impact of stabilized currency exchange rates.
As for Nanasai Co., Ltd. (“Nanasai”), sales from both rental business and sales business were weak due to adecrease in the number of orders received from our valued clients, including department stores, with business confidence
in the clothing industry showing no sign of recovery. Sales from the construction business significantly fell below suchsales for the corresponding period of the previous fiscal year due to postponement by our valued clients of sales spacerenovation projects and the absence of large-scale orders received during the corresponding period of the previous fiscal
year. As a result, overall sales significantly fell, decreasing by 26% from such sales for the corresponding period of theprevious fiscal year. Operating loss increased due to a decrease in revenue as compared to operating loss for thecorresponding period of the previous fiscal year.
As a result of the above, overall sales and operating income attributable to our “Other” segment decreased by 18%
and 15%, respectively, as compared to the corresponding results for the corresponding period of the previous fiscal year.

(2)

Net sales:

3,685 million yen(a decrease of 18.0% as compared to the corresponding period of theprevious fiscal year)

Operating income:55 million yen(a decrease of 15.4% as compared to the corresponding period of theprevious fiscal year)

Qualitative Information regarding Consolidated Financial Condition(i)

Assets, Liabilities and Total Shareholders’ Equity

Our total assets as of the end of the current consolidated first quarter were 299,065 million yen, an increase of
4,107 million yen from the end of the previous fiscal year, mainly due to increases in inventories and investments at market
value.
Our total liabilities were 64,722 million yen, an increase of 2,246 million yen from the end of the previous fiscal
year, due to increases in short-term bank loans and other current liabilities.
Total Wacoal Holdings Corp. shareholders’ equity was 229,528 million yen, an increase of 1,960 million yen fromthe end of the previous fiscal year, due to an increase in unrealized gain on securities.
As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated first quarter
was 76.7%, a decrease of 0.5% from the end of the previous fiscal year.
(ii)

Cash Flows

Cash and cash equivalents as of the end of the consolidated first quarter of the current fiscal year were 31,669
million yen, a decrease of 2,326 million yen from the end of the previous fiscal year.

-5-(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 1,195 million yen, a decrease of 1,593 million yen as compared tothe corresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net incomeof 3,950 million yen plus adjustments for depreciation, amortization and deferred income taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 2,749 million yen, as compared to 3,162 million yen of cash inflow for
the corresponding period of the previous fiscal year, due to an increase in time deposits and capital expenditures.
(Cash Flow Used in Financing Activities)
Cash flow used in financing activities was 758 million yen, a decrease of 1,881 million yen as compared to thecorresponding period of the previous fiscal year, due to cash dividend payments and repurchase of treasury stock, despite
an increase in short-term bank loans.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results

We have not revised our forecast of consolidated business results for the six-month period ending September 30,
2017 and the fiscal year ending March 31, 2018 since our announcement on May 10, 2017.

-6-

2.

Consolidated Quarterly Financial Statements and Accompanying Notes(1)

Consolidated Quarterly Balance SheetsI.

Accounts

Previous Fiscal Year
as of March 31, 2017

(Assets)

Millions of Yen

Current Consolidated
First Quarteras of June 30, 2017
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

33,99531,669(2,326)Time deposits

2,722

4,352

1,630

Marketable securities

1,457

1,341

(116)

Notes and accounts receivable
Allowance for returns anddoubtful receivables
Inventories

25,563

23,685(1,878)(2,477)
43,822(2,515)45,923(38)
2,101

Deferred income taxes

4,049

-

(4,049)Other current assets

4,683

7,805

3,122

113,814112,260(1,554)Land

21,555

21,5638

Buildings and structures

72,66472,926262

Machinery and equipment

17,722

17,935

213

Total current assets
II. Property, plant and equipment:

Construction in progress

274

264

(10)

112,215

112,688473(56,927)(57,541)(614)

55,28855,147(141)

Investments in affiliated companies

20,868

21,119251

Investments

59,84764,127

4,280

Goodwill

16,071

16,538467

Other intangible assets

11,84912,096247

Prepaid pension expense

10,287

10,401

114

Deferred income taxes

1,060

1,507

447

Accumulated depreciation
Net property, plant and equipment
III. Other assets:

Other
Total other assets
Total assets

5,874

5,870

(4)

125,856

131,658

5,802

294,958

299,065

4,107

-7-

I.

Accounts

Previous Fiscal Year
as of March 31, 2017

(Liabilities)

Millions of Yen

Current Consolidated
First Quarteras of June 30, 2017
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

7,716

12,5294,813

Trade notes payable

1,438

1,573

135

Trade accounts payable

11,605

12,207602

Notes and accounts payable:

Other payables

6,185

5,008

(1,177)

19,22818,788(440)

Accrued payroll and bonuses

7,093

5,489

(1,604)

Income taxes payable

2,964

1,133

(1,831)Other current liabilities

4,058

7,401

3,343

Total current liabilities

41,05945,340

4,281

II. Long-term liabilities:
Liability for termination and retirement
benefits
Deferred income taxes

1,956

1,942

(14)

17,86215,858(2,004)

1,599

1,582

(17)

Total long-term liabilities

21,417

19,382(2,035)

Total liabilities

62,47664,722

2,246

13,26013,260-

Other long-term liabilities(Equity)I.

Common stock

II. Additional paid-in capital

29,707

29,718

11

III. Retained earnings
IV. Accumulated other comprehensive income(loss):
Foreign currency translation adjustments

170,062

169,063

(999)

1,212

1,965

753

Unrealized gain on securities

21,07523,8152,740

Pension liability adjustments

(414)

(519)

(105)

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(7,334)(7,774)(440)

227,568

229,528

1,960

4,914

4,815

(99)

Total equity

232,482

234,343

1,861

Total liabilities and equity

294,958

299,065

4,107

-8-

(2)

Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

Previous Consolidated
Cumulative First Quarter(From April 1, 2016
to June 30, 2016)
Millions of Yen%

Current Consolidated
Cumulative First Quarter(From April 1, 2017
to June 30, 2017)
Millions of Yen%

Increase/(Decrease)
Millions of Yen

48,440100.0

48,674100.0

234

Cost of sales

22,50546.5

21,926

45.1

(579)

Selling, general and administrative expenses

23,15547.8

22,675

46.6

(480)

II. Operating costs and expenses

Compensation income

(708)

(1.5)

(708)

Total operating costs and expenses

45,66094.3

43,89390.2(1,767)

Operating income

2,780

5.7

4,781

9.8

2,001

III. Other income (expenses):
Interest income

(3)

31

43

12

Interest expense

(12)

(4)

8

Dividend income
Gain or loss on sales or exchange ofmarketable securities and investments - net
Valuation loss on marketable securities andinvestments - net
Gain on sale of property, plant and equipment

643

728

85

84

1

(83)

(3)

(1)

2

3,770

-

(3,770)

Other – net

(406)

96

502

Total other income (expenses)
Income before income taxes and equity in net
income of affiliated companies
Income taxes
Income before equity in net income of affiliatedcompanies
Equity in net income of affiliated companies

4,107

8.5

863

1.8

(3,244)

6,887

14.2

5,644

11.6

(1,243)

2,147

4.4

2,037

4.2

(110)

4,740

9.8

3,607

7.4

(1,133)

236

0.5

343

0.7

107

Net income
Net income attributable to noncontrollinginterests
Net income attributable to Wacoal Holdings
Corp.

4,976

10.3

3,950

8.1

(1,026)

(34)

(0.1)

(9)

(0.0)

25

4,942

10.2

3,941

8.1

(1,001)

Consolidated Quarterly Statements of Comprehensive Income

Accounts

Previous Consolidated
Cumulative First Quarter(From April 1, 2016
to June 30, 2016)
Millions of Yen

Current Consolidated
Cumulative First Quarter(From April 1, 2017
to June 30, 2017)
Millions of Yen

4,976

3,950

(1,026)

Increase/(Decrease)
Millions of Yen

I. Net income
II. Other comprehensive income (loss)- net of tax:
Foreign currency translation adjustments(7,080)

728

7,808

Unrealized gain (loss) on securities(1,481)

2,745

4,226

Pension liability adjustments

(46)

(105)

(59)

Other comprehensive income (loss)(8,607)

3,368

11,975Comprehensive income (loss)
Comprehensive loss (income) attributable tononcontrolling interests
Comprehensive income (loss) attributable to
Wacoal Holdings Corp.

(3,631)

7,318

10,949

159

11

(148)

(3,472)

7,329

10,801-9-

(4)Consolidated Quarterly Statements of Cash Flows

Accounts

I.

Previous Consolidated Cumulative
First Quarter(From April 1, 2016
to June 30, 2016)
Millions of Yen

Operating activities
1. Net income
2. Adjustments to reconcile net income to net cash
provided by operating activities(1) Depreciation and amortization(2) Allowance for returns and doubtful receivables - net(3) Deferred income taxes(4) Gain on sales or disposal of property, plant andequipment - net(5) Compensation income(6) Gain on sales or exchange of marketable securities andinvestments – net(7) Valuation loss on marketable securities and investments– net(8) Equity in net income of affiliated companies,
less dividends received(9) Changes in assets and liabilities
Decrease in notes and receivable
Increase in inventories
Increase in other current assets
Decrease in notes and accounts payable
Decrease in liability for termination and retirement
benefits(Decrease) increase in other liabilities(10) Other
Net cash provided by operating activities

II.
1.
2.
3.

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of marketablesecurities
4. Proceeds from sales of property, plant and equipment
5. Compensation income
6. Capital expenditures
7. Payments to acquire intangible assets
8. Proceeds from sales of other investments
9. Payments to acquire other investments
10. Other
Net cash (used in) provided by investing activities

III. Financing activities
1. Net increase in short-term bank loans with original
maturities of three months or less – net
2. Repayment of long-term debt
3. Repurchase of treasury stock
4. Dividends paid on common stock
5. Dividends paid to noncontrolling interests
6. OtherNet cash used in financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents
V. Net (decrease) increase in cash and cash equivalents
VI. Cash and cash equivalents, beginning of period
VII. Cash and cash equivalents, end of period- 10 -

Current Consolidated Cumulative
First Quarter(From April 1, 2017
to June 30, 2017)
Millions of Yen

4,976

3,950

1,161
198
486

1,349
32
421

(3,612)

(8)

-

(708)

(84)

(1)

3

1

242

129

2,111
(1,926)(1,316)
(800)

1,914
(2,123)(3,191)
(129)

(166)

(284)

1,482
33
2,788

(179)
22
1,195

(259)
157
-

(2,066)
439
222

4,033
(450)
(389)
331
(266)
5
3,162

92
708
(1,159)
(413)
4
(580)
4
(2,749)

3,350

4,722

(113)
(1,157)(4,648)(79)
8(2,639)(12)(440)(4,940)(88)(758)(1,496)

(14)

1,815
34,05935,874(2,326)33,99531,669

Additional Cash Flow Information
Cash paid for:
Interest
Income taxes
Noncash investing activities
Acquisition of fixed assets by assuming payment
obligation

(5)

12
2,487

4
4,549

1,676

471

Notes to Consolidated Quarterly Financial Statements(Notes on Going Concern)
Not applicable.
(Notes on Significant Changes in the Amount of Total Shareholders’ Equity)
Not applicable.
(Changes in Accounting Policy)
New accounting guidance has been adopted for the balance sheet classification of deferred taxes from the current
fiscal year. The new guidance requires deferred tax assets and liabilities to be classified as noncurrent on the consolidatedbalance sheet. The new accounting guidance has not been applied retrospectively for the financial statements for the priorperiods. The amount of current deferred tax assets as of the end of the previous fiscal year was 4,049 million yen.
(Segment Information)(i)

Operating Segment Information

Previous Consolidated Cumulative First Quarter (From April 1, 2016 to June 30, 2016)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

28,21413,019

2,714

4,493

48,440-48,440(2) Intersegment

266

2,765

242

1,381

4,654

(4,654)-

Total

28,48015,784

2,956

5,874

53,094(4,654)

48,440Operating income

1,483

1,027

205

65

2,780

-

2,780

Current Consolidated Cumulative First Quarter (From April 1, 2017 to June 30, 2017)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales
27,877

14,353

2,759

3,685

48,674-

48,674(2) Intersegment

279

3,011

269

1,251

4,810

(4,810)-Total

28,156

17,364

3,028

4,936

53,484(4,810)48,674

Operating income

2,298

2,206

222

55

4,781

-

4,781

(1) External customers(Note)

Core products of respective businesses:
Wacoal business (Domestic): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Wacoal business (Overseas): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, other textile-related products, etc.
Peach John business:
innerwear (foundation, lingerie, and nightwear), outerwear, and other textile-related products,
etc.
Other:
innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, othertextile-related products, mannequins, construction of stores and interior design, etc.

- 11 -

(ii)Segment Information by Region

Previous Consolidated Cumulative First Quarter (From April 1, 2016 to June 30, 2016)(Millions of Yen)Japan

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

35,325
72.9%

4,982
10.3%

8,133
16.8%

48,440100.0%

Operating income

1,695

732

353

2,780

Current Consolidated Cumulative First Quarter (From April 1, 2017 to June 30, 2017)(Millions of Yen)Japan

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

34,220
70.3%

5,212
10.7%

9,242
19.0%

48,674100.0%

Operating income

2,601

652

1,528

4,781

(Note)

1.
2.

3.

(6)

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan:
Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries
Sales in respect of consolidated companies are categorized by location.

Status of Sales

Type of productFoundationand lingerie
Innerwear Nightwear
Children’s
underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods andrelated products
Other
Total

Previous Consolidated Cumulative
First Quarter(From April 1, 2016 toJune 30, 2016)
AmountDistribution Ratio
Millions of Yen%

Current Consolidated Cumulative
First Quarter
Increase/(Decrease)(From April 1, 2017 toJune 30, 2017)
AmountDistribution Ratio
AmountRatio
Millions of Yen%
Millions of Yen%

36,053

74.4

36,937

75.9

884

2.5

2,464

5.1

2,390

4.9

(74)

(3.0)

428

0.9

413

0.8

(15)

(3.5)

38,94580.4

39,740

81.6

795

2.0

4,081
552

8.4
1.2

4,119
489

8.5
1.0

38
(63)

0.9
(11.4)

2,294

4.7

2,139

4.4

(155)

(6.8)

2,568
48,440

5.3
100.0

2,187
48,674

4.5
100.0

(381)
234

(14.8)
0.5- 12 -