[Translation]
Consolidated Business Results for the First Quarter of the Fiscal Year Ending March 31, 2019
[U.S. GAAP]
July 31, 2018
Listed Company: Wacoal Holdings Corp.
Code Number: 3591
(URL: http://www.wacoalholdings.jp/)
Representative: Position: Representative Director and President
Name: Hironobu Yasuhara
For Inquiries: Position: Director, General Manager of Corporate Planning
Name: Akira Miyagi

Stock Exchange: Tokyo

Tel: +81 (075) 682-1010

Scheduled quarterly report submission date:August 10, 2018
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, 2019 (April 1, 2018 – June 30, 2018)(1)

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

Net Sales

Millions of Yen

Operating Income%

First Quarter ended
49,373
1.4
June 30, 2018
First Quarter ended
48,674
0.5
June 30, 2017
(Note)
Quarterly comprehensive income:(Note)

Millions of Yen%

Income Before
Income Taxes andEquity in Net Incomeof AffiliatedCompanies
Millions of Yen%

Net Income
Attributable to
Wacoal Holdings
Corp.
Millions of Yen

%

4,397

(0.7)

8,921

58.1

6,289

59.6

4,430

76.0

5,644

(18.0)

3,941(20.3)

5,573 million yen ((23.8)%) for the first quarter ended
June 30, 2018
7,318 million yen (- %) for the first quarter ended
June 30, 2017

Reclassification adjustments have been made to the consolidated quarterly statements of income for the
first quarter ended June 30, 2018 pursuant to the changes in accounting principles. For details, please see“2. Consolidated Quarterly Financial Statements and Accompanying Notes (5) Notes to Consolidated
Quarterly Financial Statements (Changes in Accounting Policy).”
Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

First Quarter ended
93.51
93.17
June 30, 2018
First Quarter ended
57.46
57.27
June 30, 2017
(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.

(2)Consolidated Financial Condition

As of June 30, 2018
As of the end of Fiscal
Year (March 31, 2018)2.

Total Assets

Total Equity(Net Assets)

Total
Shareholders’EquityTotal
Shareholders’Equity Ratio

Millions of Yen

Millions of Yen

Millions of Yen%

310,463

239,616

235,05075.7

3,510.49

298,534

237,497

232,71278.0

3,454.40

Shareholders’Equity Per Share
Yen

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, 2018
–
18.00
–
Fiscal Year Ending March 31, 2019–
Fiscal Year Ending March 31, 2019
36.00–
(Estimates)(Note) Revision of estimated dividends announced during the latest quarter: No

Year-End

Total

Yen

Yen

36.00

–

36.00

72.00

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 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,
without taking into consideration of the share consolidation, are 18 yen and 36 yen, respectively.
3.

Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2019 (April 1, 2018 - March 31,
2019)(% indicates increase (decrease) from the previous fiscal year and from corresponding six-month period of 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 %Six-month Period Ending
103,000 1.0
8,000 (15.9)9,500 (13.7)
7,000 (5.9)
September 30, 2018
Annual
200,000 2.2 10,000 (13.0)
13,000 (9.0)
10,0002.6(Note) Revision of forecast of consolidated business results announced during the latest quarter: No

Yen

104.08148.69

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, 2018

Fiscal Year ended
March 31, 2018(i)

Number of issued shares (including
treasury stock) as of the end of:70,689,042 shares
71,689,042 shares(ii) Number of shares held as treasury
stock as of the end of:
3,732,609 shares
4,322,121 shares(iii) Average number of shares duringconsolidated first quarter (first
67,254,020 shares
68,589,485 sharesquarter ended June 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 third 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.

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 -------------------------------------------------- 6(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) ------------------------------------------------------------------------------------------------------- 12(6)

Status of Sales ---------------------------------------------------------------------------------------------------------------- 13

-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, 2018

During the current consolidated first quarter (from April 1, 2018 to June 30, 2018), the domestic economy showedsigns of mild recovery in consumer spending as the employment and income environment improved. With respect to theoverseas markets, in the United States, consumer sentiment remained strong and consumer spending was stable due tobetter income environment and reduced income tax rates. While the improvement in the consumer sentiment remained
limited in the United Kingdom due to increasing uncertainty over Brexit, the economy in the Eurozone area continued toshow signs of mild recovery as the employment and income environment improved. 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.
Our group is working to complete the foundation to enhance our business efficiency and to invest in fields where
we can expect growth during the current fiscal year, which is the last year of our mid-term business plan (from fiscal year2017 to fiscal year 2019). In our domestic business, we are making efforts to further strengthen collaboration, and to
improve productivity in our wholesale business through reorganization. In addition, we will further make efforts toimprove profitability of our retail business, and to complete and begin phased operation of our omni-channel service base.
In our overseas business, we will expand the number of counties where our e-commerce website is available, andstrengthen sales of our products sold at regular price through third-party e-commerce websites, while also improving ourservices at department stores and our directly managed retail stores. In China and ASEAN-member countries where our
product supply bases are located, we are moving forward with efforts to build facilities to produce non-sewing productsthat are highly competitive in terms of product quality and cost.
Consolidated sales for the three months ended June 30, 2018 increased by 1% from consolidated sales for thecorresponding period of the previous fiscal year. In our domestic innerwear business, while wholesale sales regained somevitality and retail achieved strong sales, sales from our wellness business and swimwear business were weak. Overall sales
from our overseas business were driven by the sales (on the Japanese Yen basis) from China, which exceeded by 17% fromsuch sales for the corresponding period of the previous fiscal year. While revenue from our Peach John decreased due topoor domestic sales, sales from other business segment recorded a significant increase in revenue due to the completion oflarge-scale construction by Nanasai Co., Ltd. (“Nanasai”).
Consolidated operating income decreased by 1% from consolidated operating income for the corresponding periodof the previous fiscal year. The gross profit rate increased for our domestic business as a result of reforming the businessstructure and sales profit from our overseas business increased due to increased revenue. On the other hand, operating
income fell below operating income for the corresponding period of the previous fiscal year due to decreased profit fromboth Peach John business and other business segments resulting from weak sales in Japan and poor sales from Lecien
Corporation (“Lecien”), respectively, as well as due to the absence of an increase in profit generated from compensation
income from leaving a factory space occupied by our subsidiary recorded during the corresponding period of the previous
fiscal year.
Consolidated income before income taxes and equity in net income of affiliated companies increased by 58% fromsuch consolidated income for the corresponding period of the previous fiscal year, due to recognition of valuation gain on
equity securities of 3,200 million yen following the changes in accounting policy (please see “2. Consolidated Quarterly
Financial Statements and Accompanying Notes (5) Notes to Consolidated Quarterly Financial Statements (Changes in
Accounting Policy)).
The key exchange rates used for the current consolidated first quarter were: 109.07 yen to the U.S. dollar; 148.55
yen to the Sterling pound; and 17.05 yen to the Chinese yuan.
Net sales:

49,373 million yen(an increase of 1.4% as compared to the corresponding period of theprevious fiscal year)

Operating income:

4,397 million yen(a decrease of 0.7% as compared to the corresponding period of theprevious fiscal year)

Income before income
taxes and equity in net

8,921 million yen(an increase of 58.1% as compared to the corresponding period of the-2-

income of affiliatedcompanies:

previous fiscal year)

Net income attributable to
Wacoal Holdings Corp.:

6,289 million yen(an increase of 59.6% as compared to the corresponding period of theprevious fiscal year)(ii)

Business Overview of Our Operating Segmentsa.

Wacoal Business (Domestic)

To strengthen collaboration and improve productivity in our wholesale business, Wacoal Corp. integrated andreorganized its divisions, formerly called the Wacoal Brand Operation Division, Chain Store Operation Division andWellness Operation Division, to unify our sales efforts toward retailers, under the supervision of “Wholesale Division”
during the current fiscal year.
Sales from our Wholesale Division decreased by 1% as compared to such sales for the corresponding period of theprevious fiscal year. Over-the-counter sales decreased by 3% due to withdrawal of certain brands and weak sales of luxury
product lineup, while sales of “GOCOCi,” our brassieres marketed for their comfort and “PARFAGE,” our brand designed
specifically for career women, were strong. However, sale productivity improved as a result of changing our sale style to
one where sales representatives sell both Wacoal and Wing brand products. As a result, sales from general merchandise
stores increased by 5% due to strong sales of “Pulili,” our product under the Wing brand targeting juniors, which increasedby 12%, on top of sales of Wacoal brand products, which remained at about the same level as such sales for thecorresponding period of the previous fiscal year. On the other hand, although sales of Wing brand products were strong asa result of advanced delivery in preparation for the summer sales campaigns of the major general merchandise stores,
wholesale sales were negatively impacted by the weak over-the-counter sales at department stores, as well as poor sales of“CW-X” sport brand products, whose sales expanded during the corresponding period of the previous fiscal year throughsport specialty stores and third-party e-commerce websites, resulting from increasing competition in the market offunctionality tights.
Sales from our retail business exceeded such sales for the corresponding period of the previous fiscal year by 5%.
This increase was due to the expansion of sales of tube top products newly launched under “BRANGENIC,” a brandcovering our cross-store common products among directly managed retail stores that received a favorable market response,and sales from our core directly managed retail stores, “AMPHI,” which increased by 10% from such sales for thecorresponding period of the previous fiscal year with a higher percentage of visitors making purchases as a result of ourcontinued initiatives to strengthen relationships with our customers.
Sales from our web sales business decreased by 6% as compared to such sales for the corresponding period of theprevious fiscal year. Sales from our webstore business increased by 10% from such sales for the corresponding period of
the previous fiscal year due to our successful initiatives to attract users who visit our own e-commerce website incollaboration with other companies run by customers or through marketing automation, and due to strong sales of“Minimizer Bras” and “Night Up Bra.” However, sales from mail-order catalogue business fell below such sales for thecorresponding period of the previous fiscal year due to the weak number of orders received following an increase inshipping costs.
Sales from Ai Co., Ltd. decreased by 24% as compared to such sales for the corresponding period of the previous
fiscal year. In our core swimwear business, although we made efforts to improve sale productivity by reducing the numberof our seasonal stores opened, we were challenged by increased competition from new entrants into the market andlow-priced products, in addition to a decrease in demand by young adult segment, which is our core target consumer.
As a result of the above, sales attributable to our “Wacoal Business (Domestic)” segment decreased by 1% ascompared to such sales for the corresponding period of the previous fiscal year.
Operating income increased by 2% as compared to operating income for the corresponding period of the previous
fiscal year. Our continued initiatives to enhance management efficiency in our wholesale business and retail business have
led to improvement in the gross profit rate and reduction of selling, general and administrative expenses, despite thenon-recurring impact of increased profit recorded during the corresponding period of the previous fiscal year forcompensation income from leaving a factory space occupied by our subsidiary.
Net sales:

27,478 million yen(a decrease of 1.4% as compared to the corresponding period of the-3-

previous fiscal year)
Operating income:b.

1,994 million yen(an increase of 2.4% as compared to the corresponding period of theprevious fiscal year)

Wacoal Business (Overseas)

Sales (on a local currency basis) from Wacoal International Corp. (U.S.) decreased by 6% as compared to suchsales for the corresponding period of the previous fiscal year. This decrease was due to a 7% decrease in theover-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 during thecorresponding period of the previous fiscal year, although e-commerce sales through our website and third-party
e-commerce websites increased by 8%.
Operating income on a local currency basis decreased by 10% as compared to such operating income for thecorresponding period of the previous fiscal year due to decreased revenue, while the gross profit rate increased as a resultof increasing the percentage of sales from our own e-commerce website and reducing discount sales.
Sales on a local currency basis (Sterling pound) for Wacoal Europe increased by 4% as compared to such sales forthe corresponding period of the previous fiscal year. While sales in Eurozone area, such as France, Spain and Italy, werepoor due to weak sales of the specialty stores, sales of our 2018 Spring/Summer collection in the United Kingdom and theUnited States, our major markets, were strong and increased by 12% and 7%, respectively, at department stores andthrough 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” werealso strong.
Operating income on a local currency basis increased by 39% as compared to such operating income for thecorresponding period of the previous fiscal year 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 thefavorable effect of increased revenue.
In China, sales on a local currency basis increased by 13% as compared to such sales for the corresponding periodof the previous fiscal year. Over-the-counter sales at department stores increased by 6% due to an increase in the numberof purchasers resulting from our successful sales promotion conducted in the current first quarter, the quarter that weachieve the largest percentage of sales in the quarters since it is the China’s high-demand season such as the Chinese New
Year and International Women’s Day. Further, e-commerce sales through third-party e-commerce websites expanded by
68% as a result of increasing the percentage of products sold at regular-price.
Operating income on a local currency basis increased by 47% as compared to such operating income for thecorresponding period of the previous fiscal year due to improvement in the gross profit rate resulting from the higher
percentage of e-commerce sales and sales of Wacoal brand products, despite an increase in selling, general andadministrative expenses such as labor costs and advertising expenses to strengthen e-commerce sales.
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 both exceeded such sales and operating income for the corresponding
period of the previous fiscal year.
Net sales:

14,728 million yen(an increase of 2.6% as compared to the corresponding period of theprevious fiscal year)

Operating income:

2,345 million yen(an increase of 6.3% as compared to the corresponding period of theprevious fiscal year)c.

Peach John BusinessOverall sales attributable to our “Peach John Business” segment decreased by 2% from such sales for thecorresponding period of the previous fiscal year due to weak sales from our domestic mail-order catalogue business andretail stores. Operating income attributable to our “Peach John Business” segment decreased by 75% as compared to such-4-

operating income for the corresponding period of the previous fiscal year due to the impact of an increase in selling,
general and administrative expenses and steady sales from our Chinese business.
With respect to sales from our domestic business, sales from mail-order catalogue business decreased by 2% as aresult of poor sales of our apparel products, despite the strong sales of our brassieres products, mainly “Miracle Nudy Bra”
along with an increase in the number of users as a result of measures using SNS. Sales from retail stores decreased by 7%
due to the impact of a decrease in the number of shop visitors caused by the lack of trending topics and a shortfall in thesales force attributable to difficulty in employment. Sales from our overseas business exceeded 41% over budget including
both shop sales and our own e-commerce sales, as a result of increasing recognition of our brand in Taiwan andmaintaining sufficient inventory of our popular products such as “Cover Cleavage Bra.”
Operating income was impacted by selling, general and administrative expenses, which increased due to TV
advertising expenses and a higher percentage of distribution costs in mail-order catalogue business, in addition to a drop insales profit resulting from decreased revenue, although gross profit rate improved as a result of reducing discount sales inour domestic business. In addition, operating income was impacted by a decrease in sales of our core products in China
and an increase in advertising expenses for third-party e-commerce websites and significantly fell below such operating
income for the corresponding period of the previous fiscal year.
Net sales:

2,707 million yen(a decrease of 1.9% as compared to the corresponding period of theprevious fiscal year)

Operating income:55 million yen(a decrease of 75.2% as compared to the corresponding period of theprevious fiscal year)

d.

Other

Sales from the business of Lecien decreased by 17% as compared to such sales for the corresponding period of theprevious fiscal year. Sales from our core innerwear business decreased by 21% from such sales for the corresponding
period of the previous fiscal year, due to a decrease in the number of orders received resulting from a decrease in thenumber of our private products handled at major general merchandise stores. Sales from our material business exceeded
such sales for the corresponding period of the previous fiscal year as a sign of recovery was seen in demand for garment
laces, while sales from our art & hobby business and apparel business were weak.
We recorded an operating loss due to worsened gross profit rate resulting from an increase in processing fee paid
at overseas factories in our innerwear business and an increase in the percentage of sales from our material business, inaddition to the impact of decreased revenue.
Sales from Nanasai increased by 77% as compared to such sales for the corresponding period of the previous fiscal
year. Sales from our construction business and sales business increased by 155% and 41%, respectively, as compared tosuch sales for the corresponding period of the previous fiscal year, as a result of completion of renovation of a major
department store’s headquarters.
With respect to operating income, we recorded income, as compared to loss that we recorded for thecorresponding period of the previous fiscal year, due to an increase in sales profit resulting from increased revenue, whilegross profit rate decreased as the percentage of sales from our construction business increased.
As a result of the above, overall sales attributable to our “Other” segment increased by 21%, and operating income
attributable to our “Other” segment decreased by 95%, as compared to the corresponding period of the previous fiscal year.
Net sales:

4,460 million yen(an increase of 21.0% as compared to the corresponding period of theprevious fiscal year)

Operating income:3 million yen(a decrease of 94.5% as compared to the corresponding period of theprevious fiscal year)

-5-

(2)

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 310,463 million yen, an increase of
11,929 million yen from the end of the previous fiscal year, mainly due to increases in cash and cash equivalents and othercurrent assets, as well as an increase in investments at market value.
Our total liabilities were 70,847 million yen, an increase of 9,810 million yen from the end of the previous fiscal
year, mainly due to increases in short-term bank loans and other current liabilities, as well as accrual of refund liability.
Total Wacoal Holdings Corp. shareholders’ equity was 235,050 million yen, an increase of 2,338 million yen fromthe end of the previous fiscal year, mainly due to an increase in retained earnings.
As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated first quarter
was 75.7%, a decrease of 2.3% 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 33,779
million yen, an increase of 4,292 million yen from the end of the previous fiscal year.
(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 2,890 million yen, an increase of 1,695 million yen as compared tothe corresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net incomeof 6,335 million yen plus adjustments for depreciation, amortization and deferred income taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 346 million yen, a decrease of 2,403 million yen as compared to thecorresponding period of the previous fiscal year, due to capital expenditures and payments to acquire tangible assets which
exceeded the cash inflows such as proceeds from sales of marketable securities.
(Cash Flow Provided by Financing Activities)
Cash flow provided by financing activities was 1,370 million yen, as compared to 758 million yen of cash outflow
for the corresponding period of the previous fiscal year, due to an increase in short-term bank loans which exceeded the
cash outflows such as 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 six-month period ending September 30,
2018 and the fiscal year ending March 31, 2019 since our announcement on May 15, 2018. Also, the impact of any change
in valuation gain or loss on equity securities has not been reflected in our forecast of consolidated business results.

-6-

2.

Consolidated Quarterly Financial Statements and Accompanying Notes(1)

Consolidated Quarterly Balance SheetsI.

Accounts

Previous Fiscal Year
as of March 31, 2018

(Assets)

Millions of Yen

Current Consolidated
First Quarteras of June 30, 2018
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

29,487

33,7794,292Time deposits

4,296

4,366

70

Marketable securities

1,567

1,716

149

Notes and accounts receivable
Allowance for returns anddoubtful receivables
Inventories

25,87324,960(913)(2,459)42,676(201)
43,458

2,258
782

‐

1,182

1,182

4,372

6,828

2,456

105,812116,088

10,276

Land

21,561

21,567

6

Buildings and structures

73,61873,696

78

Machinery and equipment

18,26818,564296

Construction in progress

254

286

32

113,701

114,113412(59,368)(60,108)(740)

54,33354,005(328)

Investments in affiliated companies

22,512

21,619(893)

Investments

69,31872,422

3,104

Goodwill

16,594

16,247(347)

Other intangible assets

12,85912,795(64)

Prepaid pension expense

10,17810,305

127

Deferred income taxes

1,194

1,232

38

Other

5,734

5,750

16

138,389

140,370

1,981

298,534

310,463

11,929Return assets
Other current assets
Total current assets
II. Property, plant and equipment:

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

Total other assets
Total assets

-7-

I.

Accounts

Previous Fiscal Year
as of March 31, 2018

(Liabilities)

Millions of Yen

Current Consolidated
First Quarteras of June 30, 2018
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

7,104

12,4095,305

Trade notes payable

1,174

1,471

297

Trade accounts payable

11,393

10,774(619)

Notes and accounts payable:

Other payables

7,053

5,283

(1,770)19,62017,528(2,092)

Accrued payroll and bonuses

7,213

5,445

(1,768)

Income taxes payable

1,979

1,506

(473)

-

3,575

3,575

Refund liability
Other current liabilities

3,716

7,728

4,012

Total current liabilities

39,632

48,191

8,559

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

1,852

1,812

(40)

17,231

18,563

1,332

2,322

2,281

(41)

Total long-term liabilities

21,40522,656

1,251

Total liabilities

61,037

70,847

9,810

Other long-term liabilities(Equity)I.

13,26013,260-

II. Additional paid-in capital

Common stock

29,76529,775

10

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

172,418

201,485

29,067

2,274

1,689

(585)

Unrealized gain on securities

27,4240(27,424)

Pension liability adjustments(1,101)(1,100)1

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(11,328)(10,059)

1,269

232,712

235,050

2,338

4,785

4,566

(219)

Total equity

237,497

239,616

2,119

Total liabilities and equity

298,534

310,463

11,929-8-

(2)Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

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

Current Consolidated
Cumulative First Quarter(From April 1, 2018
to June 30, 2018)
Millions of Yen%

Increase/(Decrease)
Millions of Yen

48,674100.0

49,373100.0

699

Cost of sales

21,96745.2

21,87844.3(89)Selling, general and administrative expenses

22,98547.2

23,098

46.8

113

II. Operating costs and expenses

Compensation income

(708)

(1.5)

-

Total operating costs and expenses

44,24490.9

44,976

91.1

708
732

Operating income

4,430

9.1

4,397

8.9

(33)

III. Other income (expenses):
Interest income

(3)

43

60

17

Interest expense

(4)

(8)

(4)

Dividend income
Gain or loss on sales or exchange ofmarketable securities and investments - net
Valuation loss on marketable securities andinvestments - net
Other – net

728

761

33

1

140

139

(1)

3,161

3,162

447

410

(37)

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

1,214

2.5

4,524

9.2

3,310

5,644

11.6

8,921

18.1

3,277

2,037

4.2

2,834

5.8

797

3,607

7.4

6,087

12.3

2,480

343

0.7

248

0.5

(95)

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

3,950

8.1

6,335

12.8

2,385

(9)

(0.0)

(46)

(0.1)

(37)

3,941

8.1

6,289

12.7

2,348

Consolidated Quarterly Statements of Comprehensive Income

Accounts

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

Current Consolidated
Cumulative First Quarter(From April 1, 2018
to June 30, 2018)
Millions of Yen

Increase/(Decrease)
Millions of Yen

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

3,950

6,335

2,385

728

(659)

(1,387)

Unrealized gain (loss) on securities

2,745

(104)

(2,849)Pension liability adjustments

(105)

1

106

Other comprehensive income (loss)

3,368

(762)

(4,130)Comprehensive income (loss)
Comprehensive loss (income) attributable tononcontrolling interests
Comprehensive income (loss) attributable to
Wacoal Holdings Corp.

7,318

5,573

(1,745)

11

28

17

7,329

5,601

(1,728)-9-

(4)Consolidated Quarterly Statements of Cash Flows

Accounts

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

I. 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 return assets
Increase in other current assets
Decrease in notes and accounts payable
Increase in refund liability
Decrease in liability for termination and retirement
benefits
Increase (decrease) in other liabilities(10) Other
Net cash provided by operating activities
II.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of equity securities
Payments to acquire equity securities
Proceeds from redemption of debt securities
Payments to acquire debt securities
Proceeds from sales of property, plant and equipment
Compensation income
Capital expenditures
Payments to acquire intangible assets
Other
Net cash used in investing activities

III. Financing activities
1. Net increase in short-term bank loans with original
maturities of three months or less
2. Repayment of long-term debt
3. Repurchase of treasury stock
4. Dividends paid on common stock
5. Dividends paid to noncontrolling interests
Net 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, 2018
to June 30, 2018)
Millions of Yen

3,950

6,335

1,349
32
421

1,384
(2,274)
1,220

(8)

(1)

(708)

-

(1)

(140)

1

(3,161)

129

234

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

898
(822)
(1,182)(2,470)(2,077)
3,565

(284)

(165)

(179)
22
1,195

1,758
(212)
2,890

(2,066)
439
4
(5)
222
(575)
92
708
(1,159)(413)
4(2,749)(1,091)
1,167
596
(7)
109
8
(475)
(653)
0
(346)

4,722

5,361

(12)
(440)
(4,940)
(88)
(758)

(13)
(1,362)(2,425)
(191)
1,370

(14)

378

(2,326)33,99531,6694,292
29,487
33,779

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

(5)

4
4,549

8
3,494

471

395

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)(i)

Revenue recognition

The new accounting guidance Revenue from Contracts with Customers (ASU2014-09, 2016-12) has been adopted
starting with the current consolidated fiscal year. This guidance requires an entity to recognize the amount of revenue
expected to be entitled in exchange for goods or services transferred under contract by such entity to customers. The
adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial position,
results of operations or cash flows. Due to the adoption of this guidance, liability related to returns which were included in“Allowance for Returns and Doubtful Receivables” under current assets through the previous consolidated fiscal year will
be classified as “Refund Liability” under current liabilities and rights to collect goods to be returned will be classified as“Return Asset” under current assets starting with the current consolidated fiscal year.
(ii)

Recognition and Measurement of Financial Instruments

The new accounting guidance Recognition and Measurement of Financial Assets and Financial Liabilities(ASU2016-01, 2018-03) has been adopted starting with the current consolidated fiscal year. This guidance requires anentity to measure equity investments (except those accounted for under the equity method of accounting or those that result
in consolidation of the investee) at fair value with any change in fair value recognized in net income. Adoption of theguidance has required the Company to recognize unrealized gains of 27,320 million yen (net of tax) on equity securities
from accumulated other comprehensive income (loss), and unrealized gains of 514 million yen (net of tax) on
non-marketable equity securities at cost as a cumulative-effect adjustment to retained earnings at the beginning of the fiscal
year ending March 31, 2019.
(iii)

Periodic Pension Cost

The new accounting guidance Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost (ASU2017-07) has been adopted starting with the current consolidated fiscal year. This
guidance requires an entity to record components of net periodic pension costs and net periodic postretirement benefit costs
other than the service cost component as other income or expenses. This guidance will be applied retrospectively to thepresentation of the service cost and the other components of net periodic benefit costs. Due to the adoption of this guidance,
351 million yen has been reclassified as other (net) from operating costs and expenses for the previous fiscal consolidated
first quarter. As a result, operating income decreased 351 million yen as compared to operating income before such
reclassification for the previous consolidated first quarter.

- 11 -

(Segment Information)(i)

Operating Segment Information

Previous 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(1) External customers

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

1,947

2,206

222

55

4,430

-

4,430

Current Consolidated Cumulative First Quarter (From April 1, 2018 to June 30, 2018)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales
27,47814,728

2,707

4,460

49,373-49,373(2) Intersegment

224

2,760

271

1,338

4,593

(4,593)-

Total

27,702

17,488

2,978

5,798

53,966(4,593)49,373Operating income

1,994

2,345

55

3

4,397

-

4,397

(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,
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.

(ii)

Segment Information by Region

Previous 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

2,250

652

1,528

4,430

Current Consolidated Cumulative First Quarter (From April 1, 2018 to June 30, 2018)(Millions of Yen)Japan

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

34,477
69.8%

5,837
11.8%

9,059
18.4%

49,373100.0%

Operating income

2,116

679

1,602

4,397

(Note)

1.
2.

3.

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.

- 12 -

(6)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, 2017 toJune 30, 2017)
AmountDistribution Ratio
Millions of Yen%

Current Consolidated Cumulative
First Quarter
Increase/(Decrease)(From April 1, 2018 toJune 30, 2018)
AmountDistribution Ratio
AmountRatio
Millions of Yen%
Millions of Yen%

36,93775.9

37,156

75.3

219

0.6

2,390

4.9

2,288

4.6

(102)

(4.3)

413

0.8

370

0.7

(43)

(10.4)

39,740
4,119
489

81.6
8.5
1.0

39,814
3,631
493

80.6
7.4
1.0

74
(488)
4

0.2
(11.8)
0.8

2,139

4.4

2,271

4.6

132

6.2

2,187
48,674

4.5
100.0

3,164
49,373

6.4
100.0

977
699

44.7
1.4

- 13 -