Fiscal Year Ending March 2027 Second Quarter (Interim) Financial Summary [Japanese GAAP] (Consolidated)

Overview of Performance

In the second quarter (interim) of the fiscal year ending March 2027, net sales were 10,161 million yen, down 0.1% year-on-year. However, profitability deteriorated significantly due to sustained high raw material, logistics and labor costs and yen depreciation, resulting in an operating loss of 1,259 million yen, an ordinary loss of 1,248 million yen, and a net loss attributable to owners of parent of 1,428 million yen for the interim period. By segment, the textile business recorded flat to slightly increased sales, while other businesses saw declines in sales and profits. An inventory valuation loss of 328 million yen was recorded, and structural reforms including workforce reductions at Chinese bases were implemented.

Outlook and Capital Policy

Although the consolidated full-year earnings forecast for fiscal 2027 was previously TBD, it has been disclosed based on interim trends. The company will promote inventory optimization, review production systems and improve capital efficiency to maintain financial health and improve cash flow. A partial sale of strategic shareholdings is planned in the second half, incorporating a special gain (gain on sale of investment securities) of 1,100 million yen. Going forward, the company will strengthen sales planning, procurement and production management to restore performance.