[Translation]
Consolidated Business Results for the Second Quarter of the Fiscal Year Ending March 31, 2021
[U.S. GAAP]
October 30, 2020
Listed Company: Wacoal Holdings Corp.
Stock Exchange: Tokyo
Code Number: 3591
(URL: https://www.wacoalholdings.jp/)
Representative: (Position) Representative Director, President and Corporate Officer(Name) Hironobu Yasuhara
For Inquiries: (Position) Corporate Officer, General Manager of Corporate Planning (Name) Hiroaki Miyake
Tel: +81 (075) 682-1010
Scheduled quarterly report submission date:November 12, 2020
Scheduled dividend payment start date:
December 2, 2020
Supplementary materials regarding quarterly business results: Yes
Explanatory meeting regarding quarterly business results:
Yes (for institutional investors, analysts and the press)(Amounts less than 1 million yen have been rounded )1.

Second Quarter of the Fiscal Year Ending March 31, 2021 (April 1, 2020 – September 30, 2020)(1)

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

Net Sales

Millions of Yen%

Second Quarter ended
73,155 (27.9)
September 30, 2020
Second Quarter ended
101,450 (0.4)
September 30, 2019
(Note)
Quarterly comprehensive
income :Second Quarter ended
September 30, 2020
Second Quarter ended
September 30, 2019(2)

Operating Income

Income Before
Income Taxes andEquity in Net
Income of AffiliatedCompanies

Net Income
Attributable to
Wacoal Holdings
Corp.

Millions of Yen

Millions of Yen

Millions of Yen

%

%

%

1,276

(86.6)

3,603(61.4)

1,782(73.3)

9,495

5.6

9,326

(42.8)

6,668(41.5)

872 million yen ((78.1)%) for the second quarter ended
September 30, 2020
3,979 million yen ((66.2) %) for the second quarter ended
September 30, 2019

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

28.56

28.44

103.07102.67

Consolidated Financial Condition

As of September 30, 2020
As of the end of Fiscal
Year (March 31, 2020)

Total Assets

Total Equity(Net Assets)

Total
Shareholders’EquityTotal
Shareholders’Equity Ratio

Millions of Yen

Millions of Yen

Millions of Yen%

308,760

207,832

204,533

66.2

3,277.56

277,688

209,448205,37174.0

3,291.06

Shareholders’Equity Per Share
Yen

2.

Status of Dividends

End of First
Quarter
Yen

Annual Dividend
End of Second End of Third
Quarter
Quarter
Yen

Yen

Fiscal Year Ended March 31, 2020
–
40.00
–
Fiscal Year Ending March 31, 2021–
20.00
Fiscal Year Ending March 31, 2021–
(Estimates)(Note) Revision of estimated dividends announced during the latest quarter: No
3.

Year-End

Total

Yen

Yen

20.00

60.00

20.00

40.00

Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2021 (April 1, 2020 - March
31, 2021)(% indicates increase (decrease) from the previous fiscal year and from corresponding six-month period of the previous fiscal year)

Net Sales

Millions of Yen %Income Before
Net (Loss)
Net (Loss)
Income Taxes
IncomeIncomeOperatingand Equity in Net
Attributable toAttributable to(Loss) Income
Income of
Wacoal Holdings Wacoal Holdings
AffiliatedCorp.
Corp. Per Share
Companies
Millions of Yen % Millions of Yen %Millions of Yen %Annual
156,000 (16.5)(1,000)300 (93.1)(500)(Note) Revision of forecast of consolidated business results announced during the latest quarter: Yes

Yen(8.01)

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.: None(ii) Changes other than (i) above: None(4)

Number of Issued Shares (Common Stock)
Second Quarter ended
September 30, 2020
(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 second quarter (second
quarter ended September 30):

Fiscal Year ended
March 31, 2020

65,589,042 shares

68,589,042 shares

3,185,075 shares

6,186,410 shares

62,403,282 shares

64,694,162 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. For notes on conditions used for the forecast of business results and cautionary statements
regarding forecast of business results, please see “1. Qualitative Information regarding Consolidated Performance during
the Second Quarter – (3) Qualitative Information regarding Forecast of Consolidated Business Results” on page 7 of theattached materials.

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 ------------------------------------------------- 6(3)

Qualitative Information regarding Forecast of Consolidated Business Results --------------------------------------- 7

2.

Consolidated Quarterly Financial Statements and Accompanying Notes ----------------------------------------------- 9(1)

Consolidated Quarterly Balance Sheets -------------------------------------------------------------------------------------- 9(2)

Consolidated Quarterly Statements of Income --------------------------------------------------------------------------- 11(3)

Consolidated Quarterly Statements of Comprehensive Income ------------------------------------------------------- 11(4)

Consolidated Quarterly Statements of Cash Flows ---------------------------------------------------------------------- 12(5)

Notes to Consolidated Quarterly Financial Statements ----------------------------------------------------------------- 13(Notes on Going Concern) -------------------------------------------------------------------------------------------------- 13(Notes on Significant Changes in the Amount of Total Shareholders’ Equity) -------------------------------------- 13(Segment Information) ------------------------------------------------------------------------------------------------------- 13(6)

Status of Sales ---------------------------------------------------------------------------------------------------------------- 14

-1-

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, 2020

Net sales
Cost of sales
Sales profit
Selling, general and administrative expenses
Operating income
Other income
A: Valuation gain (loss) on marketable securities andinvestments – net
Income before income taxes and equity in net incomeof affiliated companies
Net income attributable to Wacoal Holdings Corp.
Reference figure: Income before income taxes andequity in net income of affiliated companies not taking
into account A

Previous Cumulative
Second Quarter(From April 1, 2019
to September 30,
2019)
Amount101,450
44,99256,45846,963
9,495
789
(958)

Current Cumulative
Second Quarter(From April 1, 2020
to September 30,
2020)
Amount73,15532,15940,99639,720
1,276
703
1,624

(Millions of Yen)
Increased/(Decreased) fromprevious cumulative second
quarter

Amount(28,295)(12,833)(15,462)(7,243)(8,219)(86)+2,582%(27.9)(28.5)(27.4)(15.4)(86.6)(10.9)
-

9,326

3,603

(5,723)(61.4)

6,668

1,782

(4,886)(73.3)

10,284

1,979(8,305)(80.8)The business environment surrounding our group during the current cumulative second quarter (April 1, 2020 –September 30, 2020) has remained difficult due to the global spread of the coronavirus (the “outbreak”). While arecovery trend is visible in sales, which have improved since April and May when stay-at-home measures, temporary
closings of physical stores and other measures significantly limited economic activities, there are significant
uncertainties as the recovery remains slow due to a narrower range of activities consumers can engage in. Under suchcircumstances, we continued to move forward with our initiatives to create a management structure that provides highprofitability based on our following policies for regrowth.
【Basic Policies】
To prioritize the health and safety of our customers, employees and partner companies【Short-Term Policies】 To implement cost reduction in response to deterioration in business conditions, and tosecure a stable financial foundation
・to reassess our current initiatives and spending plans in all business fields
・to strengthen liquidity on hand in preparation for the prolonged impact of the outbreak・to adjust production to avoid having excess inventory resulting from decreased sales【Mid- andLong-Term Policies】 To conduct thorough inspection and renovation of the value chain – turning point for
creating management structure that provides high profitability
・to reassess current cost structure (promote initiatives to reduce fixed costs)
・to accelerate initiatives on digital transformation
・to review and rebuild customer touchpoints (in response to changes in key sales
channels)
・to develop products and services that our customers want to buy for their new lifestyleand to strengthen our capability to address new customer service and sale styles
Consolidated sales for the six months ended September 30, 2020 were 73.16 billion yen, a decrease of 27.9%
from such sales for the corresponding period of the previous fiscal year due to stay-at-home efforts and temporary
closings of retail stores resulting from the spread of the outbreak, as well as a decrease in the number of customers
visiting stores. Sales for the current consolidated second quarter decreased by 17.6% as compared to the corresponding
period of the previous fiscal due to the slow recovery in the number of customers visiting the physical stores in Japan-2-

and globally, although sales for the current consolidated second quarter showed a sign of recovery as compared to thecurrent consolidated first quarter (sales for which decreased by 39.7% as compared to the corresponding period of theprevious fiscal year).
Consolidated operating income was 1.28 billion yen, a decrease of 86.6% from such operating income for thecorresponding period of the previous fiscal year. While profit from sales substantially decreased as it was impacted by adecrease in revenue, we recorded an operating income as a result of our efforts to reduce costs at our operatingcompanies, as well as the use of employment adjustment subsidy and other government assistance in various countries.
Consolidated income before income taxes and equity in net income of affiliated companies was 3.60 billion yen,a decrease of 61.4% from such consolidated income for the corresponding period of the previous fiscal year. Whileother income (expenses) increased by 2.50 billion yen from the corresponding period of the previous fiscal year, werecorded a decrease in revenue, which was impacted by a decrease in operating income. We recognized a valuation gainon marketable securities and investments of 1.62 billion yen. (Under the U.S. accounting standards that we use, an
employment adjustment subsidy is recognized as part of cost of sales and selling, general and administrative expenses.
Equity securities held by the Company and consolidated subsidiaries are measured at fair value, and any change from the
beginning of the period are recognized as other income (expenses).)
The key exchange rates used for the current consolidated second quarter (previous second quarter) were: 106.92
yen (108.63 yen) to the U.S. dollar; 135.38 yen (136.73 yen) to the Sterling pound; and 15.38 yen (16.20 yen) to theChinese yuan.
(ii)

Business Overview of Our Operating Segments*Since the current consolidated cumulative first quarter, information on Ai Co., Ltd., which had previously been
included in our “Wacoal Business (Domestic)” segment, and “Peach John Business” segment, has been included in our“Other” segment following review of certain management classification of performance within our group. In addition,
for the current consolidated cumulative second quarter, we have changed our “Peach John Business” to be presented as aseparate operating segment, which had been included in our “Other” segment, because it satisfied the quantitative criteria
during the current consolidated cumulative second quarter. The segment information for the previous consolidated
cumulative second quarter has been prepared based on the segments reported for the current consolidated cumulative
second quarter. For details, please see “2. Consolidated Quarterly Financial Statements and Accompanying Notes – (5)Notes to Consolidated Quarterly Financial Statements – (Segment Information) – (i) Operating Segment Information –(Note 2) Matters regarding Changes to Operating Segments on page 13.
(Millions of Yen)
Previous Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)
AmountTotal Net Sales
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

Operating Income/(Loss)
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

101,450
57,762
27,253
5,466
10,969Current Cumulative
Second Quarter(from April 1, 2020 to
September 30, 2020)

Distribution
Ratio (%)
100.0
56.9
26.9
5.4
10.8

Previous Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)% toAmount
Sales
9,495
9.4
6,274
10.9
3,023
11.1
96
1.8
102
0.9

Amount73,15541,031
19,7055,810
6,609

Distribution
Ratio (%)
100.0
56.1
26.9
8.0
9.0

Current Cumulative
Second Quarter(from April 1, 2020 to
September 30, 2020)% toAmount
Sales
1,276
1.7
913
2.2
(287)
1,046
18.0
(396)
-

-3-

Increased/(Decreased) fromprevious cumulative
second quarter
Amount%(28,295)(16,731)(7,548)+344(4,360)(27.9)(29.0)(27.7)+6.3(39.7)

Increased/(Decreased) fromprevious cumulative
second quarter
Amount%(8,219)(5,361)(3,310)+950(498)(86.6)(85.4)+989.6-(Reference) Net Sales and Operating Income/ (Loss) of Major Subsidiaries(Millions of Yen)

Net Sales

Previous Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)

55,366
10,228Distribution
Ratio (%)
54.6
10.1

6,993
6,084
5,466
2,985
4,594

6.9
6.0
5.4
2.9
4.5

AmountWacoal Corp.
Wacoal International Corp.
(U.S)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

Current Cumulative
Second Quarter(from April 1, 2020 to
September 30, 2020)

Increased/(Decreased) fromprevious cumulative
second quarter
Amount%38,4508,511

Distribution
Ratio (%)
52.6
11.6

(16,916)(1,717)(30.6)(16.8)

4,598
4,286
5,810
2,424
2,835

6.3
5.9
7.9
3.3
3.9

(2,395)(1,798)+344(561)(1,759)(34.2)(29.6)+6.3(18.8)(38.3)

Amount*Sales to external customers only
(Millions of Yen)

Operating Income/(Loss)

Previous Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)

4,991
1,147

% to
Sales
9.0
11.2

668
752
96
(128)
187

9.6
12.4
1.8
4.1

AmountWacoal Corp.
Wacoal International Corp.
(U.S.)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

Current Cumulative
Second Quarter(from April 1, 2020 to
September 30, 2020)

(985)
(915)

% to
Sales
-

139
409
1,046
97
(203)

3.0
9.5
18.0
4.0
-

AmountIncreased/(Decreased) fromprevious cumulative
second quarter
Amount%(5,976)(2,062)

-

(529)
(343)
+950
+225
(390)

(79.2)(45.6)+989.6-*Sales and operating income/(loss) amounts of major subsidiaries are based on the accounting standards in respective countriesa.

Wacoal Business (Domestic)

Sales attributable to our “Wacoal Business (Domestic)” segment decreased by 29.0% as compared to such sales
for the corresponding period of the previous fiscal year. While the over-the-counter sales in June showed a sign ofrecovery after physical stores had resumed operation, the pace of recovery remained gradual thereafter due to a narrower
range of activities consumers could engage in. While operating income significantly decreased due to decreased
revenue, we recorded an operating income of 0.91 billion yen (a decrease of 85.4% from such operating income for thecorresponding period of the previous fiscal year) as a result of reduction of costs and the use of an employment
adjustment subsidy and other government assistance.
Wacoal Corp.:
Sales from Wacoal Corp. decreased by 30.6% as compared to such sales for the corresponding period of theprevious fiscal year due to weak sales from physical stores resulting from the spread of the outbreak. Although sales
were on a recovery trend as compared to such sales for the current consolidated first quarter (which decreased by 46.6%
as compared to such sales for the corresponding period of the previous fiscal year), sales for the current consolidated
second quarter remained weak resulting in a decrease of 16.9% as compared to such sales for the corresponding periodof the previous fiscal year. While consumers continued to refrain from leaving home due to the spread of the outbreak,sales from our e-commerce website increased by 65.9% as compared to such sales for the corresponding period of theprevious fiscal year as a result of strong sales of our products such as “Night Up Bra”, our sleep bra, in response to thedemand from consumers affected by stay-at-home measures. Although our retail business, which operates directlymanaged stores, was significantly impacted by the temporary closings of many physical stores by the declaration of astate of emergency, sales for the current consolidated second quarter only decreased by 4.2% as compared to such sales
for the corresponding period of the previous fiscal year showing strong recovery after the declaration of a state of-4-emergency was lifted. On the other hand, sales from our wholesale business remained weak, in the absence of lastminute demand before the consumption tax increase during the previous fiscal year, in part due to a decrease in thenumber of customers visiting department stores located in the center of the metropolitan areas following changes in
consumer attitudes and behavior to avoid travelling and crowds. We completed installing our 3D body scanning and AI(artificial intelligence)-based customer service system at twelve shops by the end of September 2020.
We recorded an operating loss of 0.99 billion yen (as compared to operating income of 4.99 billion yen for thecorresponding period of the previous fiscal year), despite our efforts to reduce costs, they were not enough to offset a
decrease in revenue. The employment adjustment subsidy of 1.46 billion yen is not included and reflected in theoperating loss above as the amount of such employment adjustment subsidy is recognized as non-operating income(which has been reclassified as operating income (loss) under the consolidated business results based on the U.S.
accounting standards).

b.

Wacoal Business (Overseas)

Sales attributable to our “Wacoal Business (Overseas)” segment on a Japanese yen basis decreased by 27.7% ascompared to such sales for the corresponding period of the previous fiscal year due to temporary closings of retail stores
across the world following the spread of the outbreak, as well as the appreciation of the Japanese yen (0.44 billion yen).
We recorded an operating loss of 0.29 billion yen (as compared to operating income of 3.02 billion yen for thecorresponding period of the previous fiscal year). This operating loss was due to our strategic marketing investmentsthat we continued to make in order to achieve rapid growth of Intimates Online Inc. (“Intimates Online”), which we
acquired during the previous fiscal year, as well as the impact of decreased revenue, despite our efforts to reduce costs
by using government assistance provided by governments across the world.
Wacoal International Corp. (U.S.):
Sales from Wacoal International Corp. (U.S.) on a local currency basis decreased by 15.4% (a decrease of 16.8%
on a Japanese yen basis) as compared to such sales for the corresponding period of the previous fiscal year. Due to thefavorable impact of the inclusion of sales in July generated from Intimates Online, which has been consolidated in ourbusiness results since August 2019, sales for the current consolidated second quarter remained at about the same level assuch sales for the corresponding period of the previous fiscal year, achieving an improvement from the level of sales forthe current consolidated first quarter (which decreased by 31.0% as compared to such sales for the corresponding periodof the previous fiscal year). The e-commerce business of Wacoal America Inc., which distributes “Wacoal” and“b.tempt’d” brand products maintained a high growth rate in sales, achieving an increase of 62.3% from such sales forthe corresponding period of the previous fiscal year. Sales from third-party e-commerce websites were also strong. Sales
from physical stores (department stores), however, were weak due to the impact of our clients’ expense control overpurchases following deterioration in their financial position, in addition to the temporary closings following theimplementation of lockdown measures at major cities. Sales from Intimates Online were 17.8 million dollars (1.91
billion yen on a Japanese yen basis) as a result of the positive impact of an increase in the number of new customers
attained as we were successful in investing in advertising mainly via SNS.
We recorded an operating loss of 8.6 million dollars on a local currency basis (0.92 billion yen on a Japanese yenbasis) (operating income of 10.6 million dollars (1.15 billion yen on a Japanese yen basis) for the corresponding periodof the previous fiscal year) as we continued to make strategic growth investments in our LIVELY brand distributed byIntimates Online, as well as the impact of the decreased revenue, despite our efforts to reduce costs by using government
assistance.
Wacoal Europe Ltd.:Sales from Wacoal Europe Ltd. on a local currency basis decreased by 33.6% (a decrease of 34.2% on a
Japanese yen basis) as compared to such sales for the corresponding period of the previous fiscal year. While sales
during the current consolidated first quarter decreased by 49.8% as compared to such sales for the corresponding periodof the previous fiscal year, sales during the current consolidated second quarter decreased by 18.2%, indicating a slow
improvement amid the outbreak. During the current consolidated cumulative second quarter, sales in the United
Kingdom, Europe and North America decreased by 44.6%, 28.0% and 28.4%, respectively. Sales from our e-commercebusiness, which we launched in the previous fiscal year, exceeded the plan and the share of e-commerce sales as to salesof the Wacoal Europe increased to 5.8%.
Although operating income on a local currency basis significantly decreased by 79.1% (a decrease of 79.2% on a
Japanese yen basis) due to the impact of decreased revenue, we were able to record profit as a result of our efforts to
reduce costs by using government assistance.
-5-

Wacoal China Co., Ltd.:Sales from Wacoal China Co., Ltd. on a local currency basis decreased by 25.8% (a decrease of 29.6% on a
Japanese yen basis) as compared to such sales for the corresponding period of the previous fiscal year. Sales for thecurrent consolidated second quarter decreased by 9.4% from such sales for the corresponding period of the previous
fiscal year, achieving a significant improvement from the current consolidated first quarter (which was a decrease of
41.7%). While revenue from sales of physical stores (department stores) decreased due to temporary closings following
the spread of the outbreak, sales have tended to improve after physical stores resumed operation in late April. While we
strengthened our alliance with online mall providers, sales from third-party e-commerce websites were strong as we
successfully promoted our “AMPHI” brand products targeting a new customer segment.
Although operating income on a local currency basis decreased by 42.6% (a decrease of 45.6% on a Japanese
yen basis) due to the impact of decreased revenue, we recorded profit as a result of our efforts to reduce costs and thepositive effect of government assistance.
c.

Peach John Business

Sales attributable to “Peach John Business” segment increased by 6.3% as compared to such sales for thecorresponding period of the previous fiscal year. Sales in Japan increased by 8.2% as compared to such sales for thecorresponding period of the previous fiscal year as a result of launching trending products and our successful marketing
activities via SNS. Sales from our e-commerce website achieved growth with an increase of over 50% as compared tosuch sales for the corresponding period of the previous fiscal year due to an increase in the number of new customers
while consumers continue to refrain from leaving home amid the outbreak. Sales from directly-managed stores werealso strong after physical stores resumed operation.
We recorded an operating income of 1.05 billion yen, a significant increase from the corresponding period of theprevious fiscal year (which was 0.10 billion yen). This profit was attributable to the positive impact of the increased
revenue, as well as the impact of improvement in gross profit rate resulting from an increase in e-commerce sales fromour website as a percentage of total sales, as well as from rent concessions by the landlords of our offices following
temporary closings of physical stores.
d.

Other

Overall sales attributable to our “Other” business segment decreased by 39.7% as compared to such sales for thecorresponding period of the previous fiscal year, while we recorded an operating loss of 0.40 billion yen.
Lecien Corporation:
Sales from Lecien Corporation decreased by 18.8% as compared to such sales for the corresponding period of
the previous fiscal year due to the weak sales of our private products handled at general merchandise stores and specialty
stores, which were impacted by our clients’ expense control over purchases. We recorded an operating income of 0.10
billion yen (as compared to operating loss of 0.13 billion yen for the corresponding period of the previous fiscal year)
due to our efforts to withdraw from underperforming businesses in the fourth quarter of the previous fiscal year andreduction of selling, general and administrative expenses.
Nanasai Co., Ltd.:Sales from Nanasai Co., Ltd. decreased by 38.3% as compared to such sales for the corresponding period of theprevious fiscal year due to our construction business which was weak resulting from the cancellation and postponementof new shop openings and various events following the spread of the outbreak. We recorded an operating loss of 0.20
billion yen (as compared to operating income of 0.19 billion yen for the corresponding period of the previous fiscal year)
due to decreased revenue, despite our efforts to reduce costs.
(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 second quarter were 308,760 million yen, an increase of
31,072 million yen from the end of the previous fiscal year, mainly due to an increase in cash and cash equivalents ineffort to ensure liquidity on hand.
Our total liabilities were 100,928 million yen, an increase of 32,688 million yen from the end of the previous
fiscal year, mainly due to increases in short-term bank loans for reasons similar to those discussed with respect to assets.
-6-

Total Wacoal Holdings Corp. shareholders’ equity was 204,533 million yen, a decrease of 838 million yen fromthe end of the previous fiscal year, due to decreases in foreign currency translation adjustments.
As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated second
quarter was 66.2%, a decrease of 7.8 % 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 58,686
million yen, an increase of 30,781 million yen from the end of the previous fiscal year.
(Cash Flow Used in Operating Activities)
Cash flow used in operating activities was 2,990 million yen, as compared to cash inflow of 7,738 million yen
for the corresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net
income of 1,664 million yen plus adjustments for depreciation expenses and deferred taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 1,935 million yen, a decrease of 4,068 million yen as compared to thecorresponding period of the previous fiscal year, due to capital expenditures and payments to acquire intangible assets.
(Cash Flow Provided by Financing Activities)
Cash flow provided by financing activities was 35,839 million yen, as compared to cash outflow of 5,777 million
yen for the corresponding period of the previous fiscal year, due to procurement of short-term bank loans and long-term
debts, despite cash outflow including payments made to acquire interests in subsidiaries from holders of noncontrollinginterests as well as payments made for dividends and contingent consideration.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results(Unit: Millions of Yen, unless otherwise indicated)

Net sales

OperatingincomePre-tax net
incomeNet income
attributable to
WacoalHoldings Corp.
shareholders

Net income
attributable to
WacoalHoldings Corp.
shareholders
per share(in Yen)Previous Forecast (“A”)
Revised Forecast (“B”)
Variance (B - A)
Variance as Percentage (%)(Reference)
Results for the Previous Fiscal
Year ended March 31, 2020

158,000
156,000(2,000)(1.3)(5,000)(1,000)4,000-(3,700)
300
4,000
-

(3,700)
(500)
3,200
-

(59.29)(8.01)

186,760

6,632

4,359

3,472

54.26

We hereby revise our forecast for the fiscal year ending March 31, 2021 announced on July 31, 2020. The
impact of the change in the valuation loss or gain on marketable securities and investments to our business results is notreflected in the forecast above. The exchange rate used for the U.S. dollar is 106.00 yen to the dollar; the exchange rateused for the Sterling pound is 136.00 yen to the pound; and the exchange rate used for the Chinese yuan is 15.40 yen to
the yuan.
When we announced the forecast of consolidated business results for the fiscal year ending March 31, 2021 on
July 31, 2020, we expected that economic activities would gradually resume and recover during the current second
quarter after the lifting of the declaration of state of emergency. Although the pace of recovery remained slow in Japanand overseas due to a narrower range of activities consumers could engage in, we recorded increases from our previous
forecast (announced on July 31, 2020) in net sales, operating income, pre-tax net income, and net income attributable to
Wacoal Holdings Corp. shareholders for the current consolidated cumulative second quarter, as a result of our efforts to
reduce costs at our operating companies and inclusion of valuation gain on marketable securities and investments, aswell as our e-commerce business which maintained high growth.

-7-On the other hand, the business environment surrounding our group continues to remain uncertain as the numberof coronavirus infections is increasing overseas, and there is concern for another wave of infection in Japan. At thispoint, it is difficult to assess when the outbreak will end or when the consumption will recover, and accordingly we havereassessed and revised our plan for the second half of the current fiscal year.
As a result of the above, while we forecast net sales to decrease by 2.0 billion yen, we forecast both operating
income and pre-tax net income to increase by 4.0 billion yen, and net income attributable to Wacoal Holdings Corp.
shareholders by 3.2 billion yen, from the previously announced forecasts.
As we have not assumed any further large-scale slowdown in economic activities from spread of the outbreak,the actual business results may differ largely from the forecast due to various factors. We will announce the impact on
our business results immediately if important matters to be disclosed occur.
We will continue to move forward with our initiatives to create a management structure that provides regrowthand high profitability, and will continue to provide services and values that meet customers’ demand as we enter a newera, through our omni-channel strategies with fusion of online and offline and by implementing a thorough restructuringof customer oriented value chain.

-8-

2.

Consolidated Quarterly Financial Statements and Accompanying Notes(1)

Consolidated Quarterly Balance SheetsI.

Accounts

Previous Fiscal Year
as of March 31, 2020

(Assets)

Millions of Yen

Current Consolidated
Second Quarteras of September 30, 2020
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

27,90558,68630,781

797

810

13

Time deposits
Marketable securities

656

532

(124)

20,062

20,765

703

(489)

(482)

7

Inventories

43,42743,551

124

Return assets

868

971

103

4,964

5,638

674

98,190130,471

32,281

Land

21,46020,809(651)

Buildings and structures

74,03973,224(815)

Machinery and equipment

18,782

19,004

222

Notes and accounts receivable
Allowance for doubtful receivables

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

Construction in progress

1,090

1,102

12

115,371

114,139(1,232)(63,288)(63,561)(273)

52,08350,578(1,505)

Operating leases right-of-use assets

13,54012,635(905)

Investments in affiliated companies

21,595

20,951(644)

Investments

43,90445,0191,115

Goodwill

22,371

22,273(98)

Other intangible assets

14,547

14,5558

Prepaid pension expense

4,974

5,254

280

Deferred income taxes

1,118

1,399

281

Other

5,366

5,625

259

127,415

127,711296

277,688308,760

31,072

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

Total other assets
Total assets

-9-

I.

Accounts

Previous Fiscal Year
as of March 31, 2020

(Liabilities)

Millions of Yen

Current Consolidated
Second Quarteras of September 30, 2020
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

3,364

41,65738,293

Notes and accounts payable:
Trade notes payable

1,112

811

(301)

Trade accounts payable

9,588

8,050

(1,538)Other payables

7,107

3,985

(3,122)

17,807

12,846(4,961)

Accrued payroll and bonuses

6,734

6,506

(228)

Income taxes payable

4,878

2,477

(2,401)

Refund liability

2,645

3,010

365

Short-term operating lease liabilities

4,600

4,303

(297)

Contingent consideration (short-term)
Other current liabilities
Total current liabilities

-

1,058

1,058

4,079

5,225

1,146

44,10777,082

32,975

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

35

1,174

1,139

2,069

2,069

0

7,911

8,219

308

Long-term operating lease liabilities

9,101

8,507

(594)

Contingent consideration(long-term)

2,786

1,650

(1,136)

Other long-term liabilities

2,231

2,227

(4)

Total long-term liabilities

24,133

23,846(287)

Total liabilities

68,240100,928

32,68813,26013,260-(Equity)I.

Common stock

II. Additional paid-in capital

29,83629,126(710)

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

185,233

177,363(7,870)(1,033)(2,011)(978)Pension liability adjustments(4,594)(4,282)312

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(17,331)(8,923)

8,408

205,371

204,533

(838)

4,077

3,299

(778)

Total equity

209,448

207,832(1,616)

Total liabilities and equity

277,688308,760

31,072- 10 -

(2)Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

Previous Consolidated
Cumulative Second Quarter(From April 1, 2019
to September 30, 2019)
Millions of Yen%

Current Consolidated
Cumulative Second Quarter(From April 1, 2020
to September 30, 2020)
Millions of Yen%

Increase/(Decrease)
Millions of Yen

101,450

100.0

73,155100.0(28,295)

Cost of sales

44,992

44.3

32,15944.0(12,833)

Selling, general and administrative expenses

46,96346.3

39,72054.3(7,243)

Total operating costs and expenses

91,955

90.6

71,87998.3(20,076)

Operating income

9,495

9.4

1,276

1.7

(8,219)II. Operating costs and expenses:

III. Other income (expenses):
Interest income

136

34

(102)

Interest expense

(13)

(32)

(19)

Dividend income
Valuation gain (loss) on marketable securities
and investments – net
Other – net

865

690

(175)

(958)

1,624

2,582

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
Net income
Net loss (income) attributable to noncontrollinginterests
Net income attributable to Wacoal Holdings
Corp.

(3)

(199)

11

210

(169)

(0.2)

2,327

3.2

2,496

9,326

9.2

3,603

4.9

(5,723)

2,922

2.9

2,350

3.2

(572)

6,404

6.3

1,253

1.7

(5,151)

345

0.4

411

0.6

66

6,749

6.7

1,664

2.3

(5,085)

(81)

(0.1)

118

0.1

199

6,668

6.6

1,782

2.4

(4,886)

Consolidated Quarterly Statements of Comprehensive Income

Accounts

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

Previous Consolidated
Cumulative Second Quarter(From April 1, 2019
to September 30, 2019)
Millions of Yen

Current Consolidated
Cumulative Second Quarter(From April 1, 2020
to September 30, 2020)
Millions of Yen

Increase/(Decrease)
Millions of Yen

6,749

1,664

(5,085)(3,181)(1,104)

2,077

Pension liability adjustments

411

312

(99)

Other comprehensive income (loss)(2,770)

(792)

1,978

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

3,979

872

(3,107)

(92)

244

336

3,887

1,116

(2,771)- 11 -

(4)Consolidated Quarterly Statements of Cash Flows

Accounts

Previous Consolidated Cumulative
Second Quarter(From April 1, 2019
to September 30, 2019)
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 doubtful receivables - net(3) Deferred income taxes(4) (Gain) loss on sales or disposal of property, plant andequipment - net(5) Impairment charges on property, plant and equipment(6) Valuation (gain) loss on marketable securities andinvestments – net(7) Equity in net income of affiliated companies,
less dividends received(8) Changes in assets and liabilities
Increase in notes and receivable
Increase in inventories
Increase in return assets(Increase) decrease in other current assets
Decrease in notes and accounts payable
Increase in refund liability
Increase in liability for termination and retirement
benefits(Decrease) increase in other liabilities(9) Other
Net cash (used in) 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
Proceeds from sales of property, plant and equipment
Capital expenditures
Payments to acquire intangible assets
Payments for loans
Acquisition of new subsidiaries (net of cash acquired)
Other
Net cash used in investing activities

III. Financing activities
1. Net increase (decrease) in short-term bank loans withoriginal maturities of three months or less
2. Procurement of short-term loan (over 3 months)
3. Procurement of long-term debt
4. Repayment of long-term debt
5. Repurchase of treasury stock
6. Dividends paid on common stock
7. Dividends paid to noncontrolling interests
8. Proceeds from stock issuance to noncontrolling interests
9. Payments to acquire interests in subsidiaries fromnoncontrolling interests
10. Contingent consideration payment
Net cash provided by (used in) financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents
V. Net increase (decrease) in cash and cash equivalents
VI. Cash and cash equivalents, beginning of period
VII. Cash and cash equivalents, end of period- 12 -

Current Consolidated Cumulative
Second Quarter(From April 1, 2020
to September 30, 2020)
Millions of Yen

6,749

1,664

2,829
46
(1,346)

3,013
11
(81)

17

(370)

-

625

958

(1,624)174

116(2,699)
(95)
(321)
266
(2,252)
597

(801)
(348)
(103)
(700)
(3,427)
365

533

173

2,023
259
7,738

(1,475)(28)(2,990)

(297)
3,533
3,259
(260)
326
39
(1,622)(1,748)(9,243)10(6,003)

(323)
292
288
(6)
321
643
(1,364)(1,494)(315)
23(1,935)(233)

17,848(28)(3,102)(2,346)(184)
116

20,428
1,176
(25)
(0)
(1,248)(81)--(1,190)(5,777)(1,069)35,839

(552)

(133)

(4,594)30,13325,53930,781
27,90558,686

Additional Cash Flow Information
Previous Consolidated Cumulative
Second Quarter(From April 1, 2019
to September 30, 2019)

Accounts
Cash paid for:
Interest
Income taxes
Noncash investing activities
Acquisition of new subsidiaries (contingent
consideration)
Acquisition of fixed assets by assuming payment
obligation(5)

Current Consolidated Cumulative
Second Quarter(From April 1, 2020
to September 30, 2020)

14
2,398

24
5,054

4,400

-

802

426

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.
(Segment Information)(i)

Operating Segment Information

Previous Consolidated Cumulative Second Quarter (From April 1, 2019 to September 30, 2019)(Millions of Yen)
Wacoalbusiness(Domestic)

Wacoalbusiness(Overseas)

Peach Johnbusiness

57,762

27,253608

Total
Operating income

Net sales(1) Externalcustomers(2) Intersegment

Other

Total

Elimination

Consolidated

5,466

10,969101,450-

101,450

5,787

385

2,551

9,331

(9,331)-58,37033,0405,851

13,520110,781(9,331)

101,450

6,274

3,023

96

102

9,495

-

9,495

Current Consolidated Cumulative Second Quarter (From April 1, 2020 to September 30, 2020)(Millions of Yen)

Net sales(1) Externalcustomers(2) Intersegment

Wacoalbusiness(Domestic)

Wacoalbusiness(Overseas)

Peach Johnbusiness

41,031

19,705

5,810

6,609

Other

Total

Elimination

73,155-

Consolidated

73,155

342

4,695

308

1,840

7,185

(7,185)-

Total

41,373

24,400

6,118

8,449

80,340(7,185)73,155

Operating income (loss)

913

(287)

1,046

(396)

1,276

-

1,276

(Note)

1.

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, sportswear,
other textile-related products, mannequins, construction of stores and interior design, etc.

2.

Matters regarding Changes to Operating Segments:
Starting from the current consolidated first quarter, information on Ai Co., Ltd., which was previously presented in our“Wacoal Business (Domestic)” segment and “Peach John Business” segment, is now reflected and presented in our “Other”- 13 -

segment following review of certain management classification of performance within our group.
As a result of our assessment on quantitative criteria conducted at the end of the current consolidated second quarter, “PeachJohn Business”, which had been previously presented in our “Other” segment, has satisfied the criteria and accordingly has
been presented as a separate operating segment. The segment information for the previous consolidated cumulative second
quarter has been prepared based on the segments reported after this change.
3.

(ii)

Information on Assets by Operating Segment:
Assets attributable to our “Wacoal Business (Domestic)” segment increased by 36,253 million yen from the end of theprevious fiscal year as a result of loans borrowed during the current consolidated second quarter. Accordingly, assets
attributable to our “Wacoal Business (Domestic)” segment as of the end of the current consolidated second quarter were273,647 million yen.

Segment Information by Region

Previous Consolidated Cumulative Second Quarter (From April 1, 2019 to September 30, 2019)(Millions of Yen)Japan

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

73,665
72.6%

11,058
10.9%

16,72716.5%

101,450
100.0%

Operating income

6,555

1,207

1,733

9,495

Current Consolidated Cumulative Second Quarter (From April 1, 2020 to September 30, 2020)(Millions of Yen)

Net sales
External customers
Distribution ratio

Japan

Asia/Oceania

Europe/N.A.

Consolidated

52,967
72.4%

7,608
10.4%

12,58017.2%

73,155100.0%

(652)

1,276

Operating income (loss)
1,590
338
(Note) 1. Countries or areas are classified according to geographical proximity.
2. Main countries and areas belonging to classifications other than Japan:
Asia/Oceania: Asian countries and Australia
Europe/N.A.: North America and European countries
3. Sales in respect of consolidated companies are categorized by location.

(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
Second Quarter(From April 1, 2019 to
September 30, 2019)
AmountDistribution Ratio
Millions of Yen%

Current Consolidated Cumulative
Second Quarter
Increase/(Decrease)(From April 1, 2020 to
September 30, 2020)
AmountDistribution Ratio
AmountRatio
Millions of Yen%
Millions of Yen%

78,545

77.4

59,11480.8(19,431)(24.7)

3,941

3.9

3,049

4.2

(892)

(22.6)

594

0.6

348

0.5

(246)

(41.4)

83,08081.9

62,511

85.5(20,569)(24.8)

7,415
879

7.3
0.9

4,134
401

5.6
0.5

(3,281)(478)(44.2)(54.4)

4,241

4.2

2,632

3.6

(1,609)(37.9)

5,835
101,450

5.7
100.0

3,477
73,1554.8
100.0(2,358)(28,295)(40.4)(27.9)- 14 -