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World Co., Ltd.
Financial Results for the Fiscal Year
Ending March 31, 2023
May 2023
Copyright © 2023 WORLD CO . ,LTD . All Rights Reserved .
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World Co., Ltd.
Financial Results for the Fiscal Year
Ended March 31, 2023
Table of Contents
Copyright © 2023 WORLD CO . ,LTD . All Rights Reserved .
I. | Financial Results Review | 3 |
II. | Medium-Term Management Plan | 16 |
III. | Reference | 31 |
Disclaimer
The World Group's earnings forecast and numerical targets described in this document, other than those based on historical or objective facts, are future projections by the Company based on currently available information and are subject to risks and uncertainties. Actual results may differ significantly from earnings forecast and numerical targets due to a variety of factors, including economic environment and market trends surrounding the Group.
This document has been prepared to foster a more informed understanding of the Group, and should not be construed as a solicitation for investment. While the data has been compiled with due consideration, we shall not be held liable for any failures or damages that may arise in connection with this document due to errors contained herein, falsification of data by a third party, or any other reason whatsoever.
The Company has adopted the International Financial Reporting Standards (IFRS) accounting principles since the fiscal year ended March 31, 2013, and this document has been prepared in accordance with IFRS unless otherwise stated. Core operating profit is sales revenue minus cost of sales and SG&A expenses. For more information on business segments, refer to page 8. For abbreviations and other terminologies used in this document, refer to pages 34-35.
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Ⅰ | Financial Results |
Review |
World Co., Ltd.
Financial Results for the Fiscal Year
Ended March 31, 2023
Copyright © 2023 WORLD CO . ,LTD . All Rights Reserved .
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Financial Statements: Statement of Profit or Loss
- Core operating profit rose a sharp 2.5x YoY to ¥13.5 billion, reaching 108% of our forecast. It has expanded YoY for nine consecutive quarters, reflecting a turnaround from the negative impact of the COVID-19 pandemic.
- After the effects of structural reforms in 2H waned, we continued to ramp up cost controls. We launched a full-scale reward program for employees. Personnel expenses rose by ¥3.4 billion YoY due to lower subsidies and an increase in the provision for bonuses.
- Profit attributable to owners of parent rose 23.8x YoY to just below ¥5.7 billion, marking a sharp recovery and providing a source of funds for shareholder dividends. There is still significant room for improvement in areas such as temporary losses and financial expenses, and we will strive to increase profit attributable to owners of parent to the next level
over the medium term.
FY03/23 | FY03/23 | FY03/22 | |||||||||||||||||||
actual | forecast | Actual - forecast | actual | YoY | |||||||||||||||||
# | |||||||||||||||||||||
(Millions of yen) | % of total | % of total | Change | % change | % of total | Change | % change | ||||||||||||||
1 | Revenue | 214,246 | 100 | .0% | 212,000 | 100.0% | 2,246 | 101% | 171,344 | 100.0% | 42,901 | 125% | |||||||||
2 | Gross profit | 123,935 | 57 | .8% | 125,500 | 59.2% | (1,565) | 99% | 98,647 | 57.6% | 25,288 | 126% | |||||||||
SG&A expenses | |||||||||||||||||||||
3 | 110,396 | 51 | .5% | 113,000 | 53.3% | (2,604) | 98% | 93,258 | 54.4% | 17,139 | 118% | ② | |||||||||
Core operating profit (loss) | |||||||||||||||||||||
① | 4 | 13,539 | 6 | .3% | 12,500 | 5.9% | 1,039 | 108% | 5,389 | 3.1% | 8,150 | 251% | |||||||||
5 | Other income and | (1,853) | - | (1,600) | - | (253) | - | (3,193) | - | 1,340 | - | ||||||||||
expenses, net | |||||||||||||||||||||
6 | Operating profit (loss) | 11,686 | 5 | .5% | 10,900 | 5.1% | 786 | 107% | 2,196 | 1.3% | 9,490 | 532% | |||||||||
7 | Finance income and | (1,373) | - | (1,300) | - | (73) | - | (786) | - | -587 | - | ||||||||||
costs, net | |||||||||||||||||||||
8 | Profit (loss) before tax | 10,313 | 4 | .8% | 9,600 | 4.5% | 713 | 107% | 1,410 | 0.8% | 8,903 | 732% | |||||||||
9 | Income taxes (a) | (4,627) | - | (4,100) | - | (527) | - | (1,170) | - | -3,457 | - | ||||||||||
③ | 10 | Profit (loss) attributable to | 5,686 | 2 | .7% | 5,500 | 2.6% | 186 | 103% | 239 | 0.1% | 5,446 | 2,376% | ||||||||
owners of parent | |||||||||||||||||||||
- Includes income tax expense and non-controlling interests.
Note: Figures for FY03/21 have been adjusted to reflect the finalization of provisional accounting treatments for business combinations.
Copyright © 2023 WORLD CO.,LTD. All Rights Reserved. | 4 |
Financial Statements: Addendum to the Statement of Profit or Loss (KPI Review)
We achieved our targets in the Brand business under the motto: "There is no revival of World without the revival of our apparel brands." The Digital business recorded earnings growth. Our next goal is to increase earnings in the Platform business driven by B2B external sales.
Trends in segment profit by business (quarterly)
Core operating profit (annual rolling average; billions of yen)
Achieved recovery in apparel brands as declared
Brandbusiness | 98 | 91 | 93 | 101 | 115 | 103 | COVID | outbreak | 88 | 98 | 100 | Japan* No sores.of in | ||||||||
(51) | 62 | of ¥ | 11.5 | |||||||||||||||||
profit | ||||||||||||||||||||
73 | ||||||||||||||||||||
31 | ||||||||||||||||||||
3 | ||||||||||||||||||||
On track to top | ||||||||||||||||||||
(23) | (28) | record high | ||||||||||||||||||
(78) | (108) | billion | ||||||||||||||||||
(110) | ||||||||||||||||||||
9 | Swift turn to profit and on heading toward new record high, | 9 | salesgrowth | Same-store | ||||||||||||||
Digital | 7 | 7 | first in B2B, subsequently in B2C | |||||||||||||||
1 | ||||||||||||||||||
business | (4) | (2) | ||||||||||||||||
(6) | (6) | |||||||||||||||||
System investment (B2B) and entry | (10) | (13) | Swift turn to | |||||||||||||||
into and investment in circular and | (16) | |||||||||||||||||
other businesses | (19) | (18) | profit, on track | |||||||||||||||
(22) | (21) | |||||||||||||||||
Targeting returns on upfront | for record high | Gross | ||||||||||||||||
spending in B2B external sales | ||||||||||||||||||
42 | ||||||||||||||||||
Platform | Tailwind from pandemic- | 40 | margin | |||||||||||||||
induced demand | 36 | In addition to recording upfront | ||||||||||||||||
(medical gowns, etc.) | 32 | spending for B2B external sales, | ||||||||||||||||
25 | foreign exchange had a negative | |||||||||||||||||
21 | impact in FY03/23 | |||||||||||||||||
20 | 17 | 20 | 18 | |||||||||||||||
business | 14 | |||||||||||||||||
13 | ||||||||||||||||||
10 | 12 | 12 | ||||||||||||||||
9 | ||||||||||||||||||
4 | 3 | 1 | Inventory | |||||||||||||||
turnover | ||||||||||||||||||
4 Q 2 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q | ||||||||||||||||||
F Y 0 3 / 1 9 | F Y 0 3 / 2 0 | F Y 0 3 / 2 1 | F Y 0 3 / 2 2 | F Y 0 3 / 2 3 |
KPIs of the Brand business (1H, 2H)
Full year | ||||||||||||
1H | 2H | |||||||||||
No. of stores at beginning of year | 2,361 | 2,313 | 2,361 | |||||||||
No. of stores opened | 30 | 32 | 62 | |||||||||
No. of stores closed | STRASBURGO | (78) | (146) | (224) | ||||||||
Net increase/decrease | added at end- | (48) | (114) | (162) | ||||||||
FY03/23 | ||||||||||||
Net increase/decrease due to | 0 | 25 | 25 | |||||||||
acquisitions | ||||||||||||
No. of stores at end of year | 2,313 | 2,224 | 2,224 | |||||||||
Department stores | Held strong | 137.2% | 116.5% | 124.0% | ||||||||
Shopping centers | Accelerated | 113.7% | 115.3% | 114.7% | ||||||||
Sundries stores | Slowed down | 108.3% | 99.4% | 105.6% | ||||||||
Total | 119.8% | 112.6% | 115.6% | |||||||||
Gross margin (FY03/22) | 55.4% | 59.3% | 57.6% | |||||||||
Change in gross profit mix due to | +0.1pp | +0.4pp | +0.2pp | |||||||||
newly acquired companies | ||||||||||||
Impact of discounts on sales | +2.2pp | -0.9pp | +0.5pp | |||||||||
Impact of valuation/wear losses | +0.3pp | -0.6pp | -0.1pp | |||||||||
Change in gross profit mix due to | -0.8pp | +0.7pp | +0.9pp | |||||||||
increase in sales toother companies | ||||||||||||
Change in gross profit mix due to altered | +0.9pp | -0.8pp | -1.0pp | |||||||||
composition of sales channels | ||||||||||||
Consolidation effects for Narumiya | -0.2pp | -0.2pp | -0.3pp | |||||||||
YoY change Discounting and valuation losses | ||||||||||||
+2.4pp | -1.5pp | +0.3pp | ||||||||||
worsened due to upfront purchasing | ||||||||||||
57.9% | 57.8% | 57.8% | ||||||||||
Gross margin of autumn/winter season products | ||||||||||||
Inventory turnover (FY03/22) | Waning impact of | 1.63X | 1.74X | 3.22X | ||||||||
Narumiya | ||||||||||||
YoY difference | -0.03X | +0.10X | +0.43X | |||||||||
consolidation paved | ||||||||||||
way for improvement | ||||||||||||
Inventory turnover (FY03/23) | 1.59X | 1.84X | 3.65X | |||||||||
Notes: 1. Corporate profit and consolidation adjustments are not included.
2. Past figures have not been retroactively adjusted to reflect segment changes.
*Not including the number of franchise stores (94 stores, as of March 31, 2023)
Copyright © 2023 WORLD CO.,LTD. All Rights Reserved. | 5 |
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World Co. Ltd. published this content on 08 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 June 2023 08:08:09 UTC.