(Filed Under Financial and General Interest News). At Wacoal, a variety of factors led to a decline in sales of “new products” for Wacoal’s U.S. division for the three months ended December 31, 2017.
Meanwhile, Japanese parent company Wacoal Holding Corp., sales fell 0.4% and income plummeted 18.3% for the nine months ending December 31, 2017.
“Sales (on a local currency basis) of new products from Wacoal International Corp. (U.S.) for the autumn/winter season did not achieve the level of sales recorded for the corresponding period of the previous fiscal year, and growth in over-the-counter sales weakened,” the company reported. “Further, sales were adversely impacted by the management of inventories by certain department stores and the EC companies specialized for e-commerce and by damage from a hurricane that caused distribution delays, resulting in a decrease of 3% for the third quarter (three months ended December 31, 2017) from such sales for the corresponding period of the previous fiscal year.”
“Sales for the nine months ended December 31, 2017, however, increased by 5% as compared to such sales for the corresponding period of the previous fiscal year as a result of overall sales driven by e-commerce sales through our website and third-party e-commerce websites, which continue to show strong sales growth since the first half of the current fiscal year, as well as the initial product delivery from an increase in the number of department stores handling Wacoal brand products during the first quarter of the current fiscal year.”
“Operating income on a local currency basis significantly contributed to the business results for the first half of current fiscal year due to a greater percentage of products sold at full price and an increase in the percentage of sales from our own e-commerce website, as well as an increase in the gross profit rate which decreased the percentage of manufacturing overhead as to cost. While we experienced a slowdown in sales during the third quarter of the current fiscal year, we continued to incur costs related to product listing advertisements and website renewal to strengthen e-commerce sales. As a result, operating income for the nine months ended December 31, 2017 increased by 18% as compared to such operating income for the corresponding period of the previous fiscal year.”
Wacoal as a whole earned 9,868 million yen (about $92.8 million at current exchange rates) on sales of 148,416 million yen (about $1.4 billion) in the nine months ended December 31, 2017 compared to 12,085 million yen (about $113.6 million) on sales of 149,019 million yen (about $1.4 billion) in the same period the year before.
The European intimates brands that Wacoal owns, a portion of which also sell into the U.S. market, reported mixed results. “While sales on a local currency basis (Sterling pound) for Wacoal Europe fell below such sales for the corresponding period of the previous fiscal year due to the effect of loss of sales that could have been recorded from the brands which were liquidated in France, sales in the major markets, including the United Kingdom and the United States were strong. Sales through third-party e-commerce websites which specialize in selling luxury lingerie were strong in the United Kingdom and the United States. Sales of our swimwear increased and showed high growth in North Europe, Germany and Australia, and sales also grew as a result of the effect of the weak Sterling pound in the Eurozone area.”
The company continued, noting that “In our underwear business, sales of our plus-size brand “elomi” products increased by 23% as compared to such sales for the corresponding period of the previous fiscal year, and continued to achieve high growth, and sales of our swimwear products under “Fantasie” and “Freya” were also strong with an increase of 26% and 18%, respectively, and as a result, overall sales increased by 4% as compared to such sales for the corresponding period of the previous 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 the previous fiscal year, as well as of minimizing selling, general and administrative expenses following the postponement of our website renewal for e-commerce sales.”
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