[Translation]
Consolidated Business Results for the Second Quarter of the Fiscal Year Ending March 31, 2018
[U.S. GAAP]
October 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:November 10, 2017
Scheduled dividend payment start date:
December 4, 2017
Supplementary materials regarding quarterly business results:
None
Explanatory meeting regarding quarterly business results:
Yes(Amounts less than 1 million yen have been rounded)

1.

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

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

Net Sales

Millions of Yen%

Second Quarter ended
101,976(0.4)
September 30, 2017
Second Quarter ended
102,412(3.1)
September 30, 2016
(Note)
Quarterly comprehensive income: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%%

10,09228.0

11,005

(7.4)

7,437

(19.2)

7,887(18.5)

11,887

11.7

9,200

23.0

12,651 million yen (- %) for the second quarter ended
September 30, 2017
(2,129) million yen (- %) for the second quarter ended
September 30, 2016

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

Second Quarter ended
108.88108.53September 30, 2017
Second Quarter ended
131.69131.31
September 30, 2016
(Note) We have conducted a share consolidation of common stock of Wacoal Holdings Corp. (“the Company”)
pursuant to which two (2) shares were consolidated into one (1) share effective as of October 1, 2017.
Accordingly, the “net income attributable to Wacoal Holdings Corp. per share” and the “diluted net income
attributable to Wacoal Holdings Corp. per share” have been calculated assuming that such share consolidation
has been conducted at the beginning of the previous fiscal year.

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(2)Consolidated Financial Condition

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

As of September 30, 2017298,743
238,118
233,30378.1
3,433.67
As of the end of Fiscal
294,958
232,482
227,56877.2
3,317.05
Year (March 31, 2017)(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares
was consolidated into one (1) share effective as of October 1, 2017. Accordingly, the “shareholders’ equity pershare” has been calculated assuming that such share consolidation has been conducted at the beginning of theprevious fiscal year.
2.

Status of Dividends

End of First
Quarter

Annual Dividend
End of Second End of Third
Quarter
Quarter

Yen

Yen

Yen

Fiscal Year Ended March 31, 2017–––
Fiscal Year Ending March 31, 2018–
18.00
Fiscal Year Ending March 31, 2018–
(Estimates)(Note) Revision of estimated dividends announced during the latest quarter: No

Year-End

Total

Yen

Yen

36.00

36.00

36.00

–

We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shareswere consolidated into one (1) share effective as of October 1, 2017. Please note that such share consolidation istaken into consideration in determining the amount of the year-end cash dividend per share 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 for the 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 of Business Results.”
3.

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)

Net Sales

Millions of Yen %Operating
IncomeIncome 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 %Annual
200,000 2.1 11,500
3.9 12,500 (24.6)
9,000 (28.1)(Note) Revision of forecast of consolidated business results announced during the latest quarter: No

Yen

131.76

We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares
was consolidated into one (1) share effective as of October 1, 2017. Please note that such share consolidation istaken into consideration in determining the amount of net income per share. For details, please see “Cautionary
Statement regarding Forecast of Business Results.”

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Notes(1)

Changes in significant subsidiaries in the consolidated cumulative second 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)
Second Quarter ended
September 30, 2017

Fiscal Year ended
March 31, 2017(i)

Number of issued shares (including
treasury stock) as of the end of:
71,689,042 shares
71,689,042 shares(ii) Number of shares held as treasury
stock as of the end of:
3,743,438 shares
3,083,605 shares(iii) Average number of shares duringconsolidated second quarter (second
68,303,670 shares
69,859,182 sharesquarter ended September 30):
(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2)shares has been consolidated into one (1) share effective as of October 1, 2017. Accordingly, the“number of issued shares,” “number of shares held as treasury stock” and “average number of shares
during consolidated second quarter” have been calculated assuming that such share consolidation has
been conducted at the beginning of the previous fiscal year.
*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 have conducted a shareconsolidation of common stock of the Company pursuant to which two (2) shares was consolidated into one (1) shareeffective as of 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 the fiscal year ending March 31, 2018
Interim dividend per share at the end of the second quarter:
18.00 yen (Note 1)
Year-end dividend per share:
18.00 yen (Note 2)
2. Forecast of consolidated business results for the fiscal year ending March 31, 2018
Net income per share for the fiscal year ending March 31, 2018:65.88 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 the fiscal year ending March 31, 2018 (before the share consolidation istaken into consideration) is 36.00 yen.

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Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the Second 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

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1.

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

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

During the current consolidated second quarter (from April 1, 2017 to September 30, 2017), consumer spending
was not strong due to unchanged real income, raising concerns for social welfare in the future, while the employment
environment continued to improve in the domestic economy, which continued to show signs of a mild recovery. The
environment surrounding women’s domestic innerwear market remained difficult, as consumers remained
budget-conscious and as a number of large-scale retail stores closed, although demand recovered with our inbound tourists.
On the other hand, strong growth was seen in the overseas markets: stable consumer spending in the United States as theemployment environment remained favorable; improvement in the consumer sentiment in Europe due to a decline inpolitical risks; and a positive trend of retails sales maintained in China, where its economy recovered from recession.
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 are making efforts
to strengthen sales capabilities, to improve productivity, to realize omni-channel services that will achieve synergies with
our wholesale business, to form 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 are implementing our initiatives to pursue
business collaboration among Europe and America and Asian countries, strengthen our ability to respond 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 six months ended September 30, 2017 fell below by 2%
from such sales for the corresponding period of the previous fiscal year due to a difficult environment for our deliverables
resulting from a series of closings of general merchandise stores and tighter management of inventories. This decline wasalso due to a decrease in the number of purchasers at our directly managed retail business, although over-the-counter salesof our wholesale business remained at about the same level as such sales for the corresponding period of the previous fiscal
year. Our consolidated sales from our overseas business exceeded such sales for the corresponding period of the previous
fiscal year by 8%, as a result of strong sales in the United States which were driven by sales through e-commerce websites,sustained growth of our highly competitive product brands and swimwear in Europe, particularly in the United Kingdom
and the Eurozone area. This increase was also due to a significant increase in special event sales during the high demandseason in China due to its improved market condition. Overall consolidated sales, however, decreased slightly by 0.4% ascompared to such sales for the corresponding period of the previous fiscal year, due to a decrease in revenue from our
Peach John and other business segments.
Consolidated operating income improved significantly and increased by 28% as compared to consolidated
operating income for the corresponding period of the previous fiscal year, as a result of recognition of compensation
income from leaving a factory space occupied by our subsidiary during the first quarter of the current fiscal year and theabsence of non-recurring expenses related to the liquidation proceedings for our French subsidiary that we recorded for thecorresponding period of the previous fiscal year. On the other hand, consolidated income before income taxes and equity in
net income of affiliated companies fell by 7% from the corresponding period of the previous fiscal year, due to the absenceof gain on sales of fixed assets (land) that we recorded for the first quarter of the previous fiscal year.
The key exchange rates used for the current consolidated second quarter were: 111.06 yen to the U.S. dollar;
143.61 yen to the Sterling pound; and 16.39 yen to the Chinese yuan.
Net sales:

101,976 million yen(a decrease of 0.4% as compared to the corresponding period of theprevious fiscal year)

Operating income:

10,092 million yen(an increase of 28.0% as compared to the corresponding period of theprevious fiscal year)

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

11,005 million yen(a decrease of 7.4% as compared to the corresponding period of theprevious fiscal year)

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Net income attributable to
Wacoal Holdings Corp.:

7,437 million yen(a decrease of 19.2% as compared to the corresponding period of theprevious fiscal year)(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 2% as compared to such sales for the corresponding period of
the previous fiscal year. Although sales of “GOCOCi,” our brassieres marketed for their comfort, expanded significantly,
and sales at department stores in Tokyo and Osaka area increased significantly as a result of demand by inbound tourists,
sales from such divisions were weak due to poor sales at department stores in rural areas, weak sales of the “Wing” brandcampaign brassieres at general merchandise stores and the effect of a series of closings of stores and tighter management of
inventories.
In our retail business, sales remained at about the same level as such sales for the corresponding period of theprevious fiscal year. While sales of “BRAGENIC,” our cross-store common products continued to expand significantly,
sales from our core directly managed retail store, “AMPHI,” fell below such sales for the corresponding period of theprevious fiscal year due to a decrease in the number of purchasers as a result of reduced discounts and a decrease in revenue
as a result of closure of underperforming stores.
Sales from our wellness business remained at about the same level as such sales for the corresponding period of
the previous fiscal year, as sales of our products under our core “CW-X” brand were weak due to termination of businesswith certain sport specialty stores.
Overall sales from our Web sales business (formerly catalog sales business) increased by 1% as compared to suchsales for the corresponding period of the previous fiscal year due to a decrease in average spending per customer for bothsummer and autumn catalogues in our catalog sales business, even though sales from our webstore business were strong as
we were successful in our summer clearance sale, which contributed to an increase of 17% in the number of purchasers ascompared to such number for the corresponding period of the previous fiscal year.
Sales from Ai Co., Ltd. decreased by 5% as compared to such sales for the corresponding period of the previous
fiscal year. This was due to our core swimwear business which failed to meet the level of demand, particularly of young
consumers, for products as well as in the corresponding period of the previous fiscal year, despite our efforts to reduce thenumber of our seasonal stores opened only during a period of peak demand and to focus on profitability and efficiency ofeach store while retaining temporary sales representatives became difficult. The decrease in sales was also due to the weaksales from the underwear business.
As a result, sales attributable to our “Wacoal Business (Domestic)” segment decreased by 2% as compared to suchsales for the corresponding period of the previous fiscal year. Despite increases in IT infrastructure related expenses,
expenses related to changes in the health insurance premium rate, retirement benefit expenses and other selling, generaland administrative expenses, operating income resulted with an increase of 23% from operating income for thecorresponding period of the previous fiscal year as a result of recognition of compensation income from leaving a factory
space occupied by our subsidiary during the first quarter of the current fiscal year.
Net sales:

60,427 million yen(a decrease of 1.9% as compared to the corresponding period of theprevious fiscal year)

Operating income:

5,821 million yen(an increase of 23.3% as compared to the corresponding period of theprevious fiscal year)

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b.

Wacoal Business (Overseas)

Overall sales on a local currency basis from Wacoal International Corp. (U.S.) were driven by the high sales
growth achieved through our e-commerce website and third-party e-commerce websites. Further, an increase in thenumber of department stores handling Wacoal brand products during the first quarter of the current fiscal year resulted in
new product delivery, which contributed to the overall sales with an increase of 8% from the corresponding period of theprevious fiscal year. Selling, general and administrative expenses, such as costs related to product listing advertisements
and website renewal, increased in connection with our initiatives to strengthen e-commerce sales. However, operating
income on a local currency basis increased by 33% as compared to operating income for the corresponding period of theprevious fiscal year due to a greater percentage of products sold at full price and an increase in the percentage of sales fromour own e-commerce website, as well as an increase in revenue which resulted in decreasing percentage of manufacturing
overhead as to cost.
While sales on a local currency basis for Wacoal Europe fell below such sales for the corresponding period of theprevious fiscal year due to the effect of loss of sales that could have been recorded from the brands which were liquidated
in France, orders received from our major business partners in the United Kingdom, North Europe and Germany weresteady in connection with the expansion of services on our website for retailers (B2B), and sales through third-party
e-commerce websites in the United States were also strong. Also, in our underwear business, sales of our plus-size brand“elomi” brands increased by 24% as compared to such sales for the corresponding period of the previous fiscal year, andcontinued to achieve high growth, while sales of our “Wacoal” brand products also expanded. Sales of our swimwear
products under “FANTASIE” and “Freya” were also strong during the second quarter of the current fiscal year due to thesummer heat wave, and overall sales increased by 5% as compared to such sales for the corresponding period of theprevious fiscal year. Operating income improved over budget 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 theprevious fiscal year.
Sales of our “Wacoal” brand products in China on a local currency basis increased by 9% from such sales for thecorresponding period of the previous fiscal year due to an increase in the number of purchasers resulting from openings ofspecialty stores at major department stores during China’s high-demand seasons such as the Chinese New Year,
International Women’s Day and Mother’s Day, and due to expansion of sales channels through third-party e-commerce
websites and promotional events. Sales of our “Peach John” brand products also increased significantly by 58% ascompared to such sales for the corresponding period of the previous fiscal year due to steady expansion in the number of
repeat users. As a result, overall sales increased 10% from such sales for the corresponding period of the previous fiscal
year. Operating income on a local currency basis improved significantly from the corresponding period of the previous
fiscal year with an increase of 22% due to our efforts to close underperforming stores, to postpone certain store renovation
projects, and to reduce selling, general and administrative expenses by suspending openings of “La Rosabelle” brandstores.
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 exceeded that for the corresponding period of the previous fiscal year.
Net sales:

27,744 million yen(an increase of 7.9% as compared to the corresponding period of theprevious fiscal year)

Operating income:

3,569 million yen(an increase of 50.5% as compared to the corresponding period of theprevious fiscal year)c.

Peach John Business

Sales from our domestic business showed moderate growth due to the weak retail sales of summer products atstores, while sales from retail stores of “Peach John” and “Salon by Peach John” were strong. Wholesale businessincreased by 12% 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, although average spending per customer increased
after updating the minimum purchase amount for free shipping, sales from our mail-order catalogue business dropped
significantly due to the decreasing number of users who visited our own e-commerce website. Although sales from ouroverseas business were strong as demonstrated by the sales by Taiwan Peach John Ltd. of which our operationscommenced in May and which significantly exceeded budget, overall sales decreased by 3% as compared to such sales forthe corresponding period of the previous fiscal year.

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Operating income increased by 23% as compared to such operating income for the corresponding period of theprevious fiscal year due to profitability of our Chinese business which has greatly improved, in addition to an improvementin the gross profit rate from an increase in the percentage of sales from our innerwear products.
Net sales:

5,559 million yen(a decrease of 3.0% as compared to the corresponding period of theprevious fiscal year)

Operating income:

394 million yen(an increase of 22.7% as compared to the corresponding period of theprevious fiscal year)

d.

Other

With respect to Lecien Corporation (“Lecien”), sales from our art & hobby business were strong as a result of
newly developed handcraft kits for our domestic consumers, with the expansion of the C2C market. On the other hand,sales from our core innerwear business were weak as the number of orders received for our private brand products for saleat major general merchandise stores decreased. However, we maintained sales of “Lecien” brand products at about thesame level as such sales for the corresponding period of the previous fiscal year, mainly due to sales from “brassiere forschool club activities” campaign. Also, sales from our apparel business decreased due to the withdrawal of our private
brand business sold at major general merchandise stores and the impact of weak sales from teleshopping, and sales fromour material business, which was impacted by a decrease in demand for garment laces, were weak. As a result, overallsales decreased by 15% as compared to such sales for the corresponding period of the previous fiscal year. Operating
income decreased by 59% as compared to such operating income for the corresponding period of the previous fiscal year
due to a decrease in revenue, despite improvement in the gross profit rate from a decrease in the percentage of private brandin our innerwear business and an increase in the percentage of handcraft products in our art & hobby business.
With respect to Nanasai Co., Ltd. (“Nanasai”), no sign of recovery was seen in the business confidence in theclothing industry, and sales from both rental business and sales business were weak due to a decrease in the number oflarge-scale orders received from our valued clients, including department stores, despite spot orders received for specialty
stores. Sales from the construction business fell significantly below such sales for the corresponding period of the previous
fiscal year due to postponement by our valued clients of sales space renovation projects and the absence of large-scaleorders received during the corresponding period of the previous fiscal year. As a result, overall sales decreased by 14%
from such sales for the corresponding period of the previous fiscal year. Operating income increased by 27% as comparedto such operating income for the corresponding period of the previous fiscal year due to cost rate improvement and ourefforts to reduce selling, general and administrative expenses in our rental business.
As a result of the above, overall sales and operating income attributable to our “Other” segment decreased by 12%
and 35%, respectively, as compared to the corresponding period of the previous fiscal year.

(2)

Net sales:

8,246 million yen(a decrease of 11.8% as compared to the corresponding period of theprevious fiscal year)

Operating income:

308 million yen(a decrease of 35.2% 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 second quarter were 298,743 million yen, an increase of
3,785 million yen from the end of the previous fiscal year, mainly due to an increase in investments at market value.
Our total liabilities were 60,625 million yen, a decrease of 1,851 million yen from the end of the previous fiscal
year, due to decreases in other payables and deferred income taxes.
Total Wacoal Holdings Corp. shareholders’ equity was 233,303 million yen, an increase of 5,735 million yen fromthe end of the previous fiscal year, due to increases in retained earnings and unrealized gain on securities.

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As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated second
quarter was 78.1%, an increase of 0.9% from the end of the previous fiscal year.
(ii)

Cash Flows

Cash and cash equivalents as of the end of the consolidated second quarter of the current fiscal year were 31,339
million yen, a decrease of 2,656 million yen from the end of the previous fiscal year.
(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 8,499 million yen, a decrease of 1,107 million yen as compared tothe corresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net incomeof 7,461 million yen plus adjustments for depreciation, amortization and deferred income taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 4,011 million yen, an increase of 3,298 million yen as compared to thecorresponding 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 7,300 million yen, an increase of 1,274 million yen as compared to thecorresponding period of the previous fiscal year, due to cash dividend payments and repurchase of treasury stock.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results

We have not revised our forecast of consolidated business results for the fiscal year ending March 31, 2018 since
our announcement on May 10, 2017.

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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
Second Quarteras of September 30, 2017
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

33,99531,339(2,656)Time deposits

2,722

4,689

1,967

Marketable securities

1,457

1,435

(22)

Notes and accounts receivable
Allowance for returns anddoubtful receivables
Inventories

25,563

26,973

1,410(2,477)
43,822(2,779)44,064(302)
242

Deferred income taxes

4,049

-

(4,049)Other current assets

4,683

4,276

(407)

113,814109,997(3,817)

Land

21,555

21,57621

Buildings and structures

72,664

73,123459

Machinery and equipment

17,722

18,328606

Total current assets
II. Property, plant and equipment:

Construction in progress

274

244

(30)

112,215

113,271

1,056(56,927)(58,328)(1,401)

55,28854,943(345)

Investments in affiliated companies

20,86821,243375

Investments

59,847

65,238

5,391

Goodwill

16,071

16,993922

Other intangible assets

11,84912,322473

Prepaid pension expense

10,287

10,520233

Deferred income taxes

1,060

1,641

581

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

Other
Total other assets
Total assets

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5,874

5,846

(28)

125,856

133,803

7,947

294,958

298,743

3,785

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I.

Accounts

Previous Fiscal Year
as of March 31, 2017

(Liabilities)

Millions of Yen

Current Consolidated
Second Quarteras of September 30, 2017
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

7,716

7,671

(45)

Trade notes payable

1,438

1,411

(27)

Trade accounts payable

11,605

11,071(534)

Notes and accounts payable:

Other payables

6,185

5,113

(1,072)

19,22817,595(1,633)

Accrued payroll and bonuses

7,093

6,804

(289)

Income taxes payable

2,964

3,228

264

Other current liabilities

4,058

4,982

924

Total current liabilities

41,05940,280(779)

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

1,956

1,905

(51)

17,862

16,022(1,840)

1,599

2,418

819

Total long-term liabilities

21,417

20,345(1,072)

Total liabilities

62,476

60,625(1,851)

13,26013,260-

Other long-term liabilities(Equity)I.

Common stock

II. Additional paid-in capital

29,70729,741

34

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

170,062

172,559

2,497

1,212

2,881

1,669

Unrealized gain on securities

21,07524,737

3,662

Pension liability adjustments

(414)

(540)

(126)

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(7,334)(9,335)(2,001)

227,568

233,303

5,735

4,914

4,815

(99)

Total equity

232,482

238,118

5,636

Total liabilities and equity

294,958

298,743

3,785

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(2)

Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

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

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

Increase/(Decrease)
Millions of Yen

102,412100.0

101,976

100.0

(436)

Cost of sales

47,951

46.8

46,999

46.1

(952)

Selling, general and administrative expenses

46,57445.5

45,593

44.7

(981)

II. Operating costs and expenses

Compensation income

(708)

(0.7)

(708)

Total operating costs and expenses

94,525

92.3

91,88490.1(2,641)

Operating income

7,887

7.7

10,0929.9

2,205

III. Other income (expenses):
Interest income

8920Interest expense

(23)

(10)

13

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

669

772

103

84

44

(40)

(1)

2

3

3,770

-

(3,770)

Other – net

(568)

16

584

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

4,000

3.9

913

0.9

(3,087)

11,887

11.6

11,005

10.8

(882)

3,440

3.4

3,973

3.9

533

8,447

8.2

7,032

6.9

(1,415)

879

0.9

429

0.4

(450)

9,326

9.1

7,461

7.3

(1,865)

(126)

(0.1)

(24)

(0.0)

102

9,200

9.0

7,437

7.3

(1,763)

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

(3)

69

Consolidated Quarterly Statements of Comprehensive Income

Accounts

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

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

Increase/(Decrease)
Millions of Yen

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

9,326

7,461

(1,865)(10,847)

1,653

12,500

Unrealized gain (loss) on securities

(514)

3,663

4,177

Pension liability adjustments

(94)

(126)

(32)

Other comprehensive income (loss)(11,455)

5,190

16,645Comprehensive income (loss)
Comprehensive loss (income) attributable tononcontrolling interests
Comprehensive income (loss) attributable to
Wacoal Holdings Corp.

(2,129)12,651

14,780

300

(9)

(309)

(1,829)12,642

14,471

tk-670535

-9-

(4)

Consolidated Quarterly Statements of Cash Flows

Accounts

I.

Previous Consolidated Cumulative
Second Quarter(From April 1, 2016
to September 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
Increase in notes and receivable
Decrease (increase) in inventories
Decrease in other current assets
Decrease in notes and accounts payable
Decrease in liability for termination and retirement
benefits
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

tk-670535- 10 -

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

9,326

7,461

2,368
416
(413)

2,676
287
(3)

(3,588)

56

-

(708)

(84)

(44)

1

(2)

(406)

43

(739)
178
1,509
(1,404)(1,269)(134)374(1,425)

(326)

(473)

2,396
372
9,606

1,594
66
8,499

(2,117)
1,616
50(4,133)
2,199
353

3,884
(3,234)
(868)
343
(263)
(124)
(713)

129
708
(1,876)
(859)
52
(586)
2
(4,011)

1,437

(228)

(125)
(2,546)(4,648)(167)
23(6,026)(23)(2,001)(4,940)(194)
86(7,300)(2,039)156

828
34,05934,887(2,656)33,99531,339

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

(5)

23
1,148

10
3,208

958

522

295

-

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 Second Quarter (From April 1, 2016 to September 30, 2016)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

5,733

9,345

Elimination

Consolidated

102,412-102,412Net sales(1) External customers

61,61525,719(2) Intersegment

560

4,888

504

2,920

8,872

(8,872)-

Total

62,17530,607

6,237

12,265111,284(8,872)

102,412

Operating income

4,720

2,371

321

475

7,887

-

7,887

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

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales
60,427

27,744

5,559

8,246

101,976-

101,976(2) Intersegment

558

5,575

691

2,591

9,415

(9,415)-

Total

60,98533,3196,250

10,837111,391(9,415)

101,976

Operating income

5,821

3,569

394

308

10,092-

10,092(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.

tk-670535- 11 -

(ii)Segment Information by Region

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

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

76,512
74.7%

9,990
9.8%

15,91015.5%

102,412100.0%

Operating income

5,310

1,489

1,088

7,887

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

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

73,946
72.5%

10,572
10.4%

17,45817.1%

101,976
100.0%

Operating income

6,401

1,100

2,591

10,092(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

tk-670535

Previous Consolidated Cumulative
Second Quarter(From April 1, 2016 to
September 30, 2016)
AmountDistribution Ratio
Millions of Yen%

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

75,81074.077,203

75.7

1,393

1.8

4,547

4.4

4,403

4.3

(144)

(3.2)

774

0.8

742

0.7

(32)

(4.1)

81,131

79.2

82,348

80.7

1,217

1.5

9,949
1,115

9.7
1.1

9,289
987

9.1
1.0

(660)
(128)

(6.6)
(11.5)

4,727

4.6

4,240

4.2

(487)

(10.3)

5,490
102,412

5.4
100.0

5,112
101,976

5.0
100.0

(378)
(436)

(6.9)
(0.4)

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