Gunze's consolidated second quarter results for the fiscal year ending March 2014 showed significant increases in both sales and profits, with sales of ¥69.523 billion (up 9.8% year-on-year), operating profit of ¥1.478 billion (up 68.9%), ordinary profit of ¥1.969 billion (up 162.2%), and net profit of ¥820 million (up 311.3%).
By segment, sales increased in the Functional Solutions division to ¥29.03 billion (up 24.8%), the Apparel division to ¥34.08 billion (up 0.3%), and the Lifestyle Creation division to ¥6.83 billion (up 2.9%). However, the Apparel division's operating profit fell to ¥453 million (down 45.9%). This was largely due to a foreign exchange loss of approximately ¥870 million due to the weak yen.
In the apparel division, the innerwear business saw strong sales of the fashionable men's underwear brand "Body Wild," but cotton-blend products struggled due to competition from the functional private brands of mass retailers. Furthermore, sales of high-priced, high-quality basic white underwear, the company's specialty, continue to stagnate. Next spring/summer, the company plans to make a comeback by revamping its men's brand "YG" and its women's brand "Touché." Meanwhile, in the legwear division, plain stockings remained strong, but profitability worsened due to the weak yen and rising overseas labor costs. Next spring/summer, the company plans to renew its large brand "Sabrina," expand sales of leggings pants, a new trendy product, and expand sales areas for men's foot covers.
The company announced its full-year earnings forecast in May of this year as sales of 139 billion yen (up 5.0% year-on-year), operating profit of 3 billion yen (up 75.4% year-on-year), ordinary profit of 2.9 billion yen (up 24.6% year-on-year), and net profit for the year of 1.5 billion yen, and will not be revising these forecasts.
By segment, sales increased in the Functional Solutions division to ¥29.03 billion (up 24.8%), the Apparel division to ¥34.08 billion (up 0.3%), and the Lifestyle Creation division to ¥6.83 billion (up 2.9%). However, the Apparel division's operating profit fell to ¥453 million (down 45.9%). This was largely due to a foreign exchange loss of approximately ¥870 million due to the weak yen.
In the apparel division, the innerwear business saw strong sales of the fashionable men's underwear brand "Body Wild," but cotton-blend products struggled due to competition from the functional private brands of mass retailers. Furthermore, sales of high-priced, high-quality basic white underwear, the company's specialty, continue to stagnate. Next spring/summer, the company plans to make a comeback by revamping its men's brand "YG" and its women's brand "Touché." Meanwhile, in the legwear division, plain stockings remained strong, but profitability worsened due to the weak yen and rising overseas labor costs. Next spring/summer, the company plans to renew its large brand "Sabrina," expand sales of leggings pants, a new trendy product, and expand sales areas for men's foot covers.
The company announced its full-year earnings forecast in May of this year as sales of 139 billion yen (up 5.0% year-on-year), operating profit of 3 billion yen (up 75.4% year-on-year), ordinary profit of 2.9 billion yen (up 24.6% year-on-year), and net profit for the year of 1.5 billion yen, and will not be revising these forecasts.
