Honma Golf Limited (Group) reported in its annual report for the 2026 fiscal year ended March 31, 2026, that the world’s golf industry has been facing continued and increased competition resulting from weakening consumer confidence over the last few years, while the global economy and certain areas of the world have experienced lingering and material economic slowdowns. 

As a result, the company said revenue from some markets showed varying degrees of decline during fiscal 2026, while others rebounded resiliently. 

The Group’s total revenue increased by 2.7 percent to ¥22,259.7 million ($147.7 mm) for fiscal 2026 from ¥21,672.1 million for the year ended March 31, 2025 (fiscal 2025). On a constant-currency basis, the Group’s total revenue increased 2.7 percent year-over-year (y/y). 

Honma Golf Limited reports in Japanese yen (¥) currency. 

Category Summary 
The Group offers golfers a complete golf lifestyle experience through an extensive portfolio of Honma-branded golf clubs, golf balls, bags, apparel, and other accessories.

Golf Clubs revenue increased 4.5 percent y/y to ¥15,747.2 million for fiscal 2026, said to be mainly due to a 71.5 percent stable recovery of sales in Korea. Revenue from China (including Hong Kong and Macau) and North America also expanded. However, club sales decreased by 13.8 percent in Japan for fiscal 2026 due to intensified market competition and continued channel optimization. On a constant-currency basis, revenue from Golf Clubs increased 4.6 percent y/y during the same period.

Golf Balls revenue increased by 12.2 percent from ¥2,021.3 million for the year ended 31 March 2025 to ¥2,268.6 million for fiscal 2026. Golf Balls sales rose by 5.1 percent, 4.8 percent and 87.3 percent in Japan, Korea and China (including Hong Kong and Macau), respectively. On a constant-currency basis, revenue from Golf Balls increased by 12.5 percent during the same period.

Apparel revenue decreased by 6.4 percent y/y to ¥2,937.0 million for fiscal 2026. Due to weak consumer sentiments in China and reduction in total number of stores, Apparel sales in China declined 8.2 percent y/y. On a constant-currency basis, revenue from Apparel decreased by 6.7 percent during the same period.

Accessories and Other related products revenue decreased by 9.7 percent y/y to ¥1,306.9 million for fiscal 2026 where most markets showed different degree of sales retraction. On a constant-currency basis, revenue from Accessories and Other related products decreased by 9.7 percent y/y during the same period. The decrease was said to be primarily caused by fierce market competitions across main markets.

Regional Summary
The Group’s products are sold in approximately 50 countries worldwide, primarily in Asia and also across North America, Europe and other regions.

Japan revenue decreased 8.7 percent y/y to ¥8,260.3 million for fiscal 2026. The decrease was said to be primarily attributable to a 5.4 percent drop in Japan’s Wholesale revenue and a similar decline of 11.9 percent in Japan’s Retail revenue as the Group continued to shift towards high-profit self-operated and wholesales channels.

Korea reportedly showed a rock-solid rebound with full year sales growing 55.2 percent to ¥4,137.8 million for fiscal 2026. The company said thanks to continued investment into Honma’s self-operated channels and renewal of the Group’s distribution arrangement, sales grew exponentially in both channels for fiscal 2026. On a constant-currency basis, revenue from Korea surged 57.4 percent y/y during the same period.

China revenue (including Hong Kong and Macau) improved 1.3 percent y/y to ¥6,705.2 million for fiscal 2026 as overall economy and retail market sentiment in China continued to experience slowdowns and downward pressure, according to a company note. On a constant-currency basis, revenue from China (including Hong Kong and Macau) improved 1.2 percent y/y during the same period.

North America revenue increased 7.5 percent y/y to ¥671.9 million for fiscal 2026, said to be mainly due to successful activation of Beres 10 and country-specific clubs, including co-branded products. On a constant-currency basis, revenue from North America increased 8.1 percent y/y during the same period.

Europe revenue decreased 11.1 percent y/y to ¥374.1 million for fiscal 2026. On a constant-currency basis, revenue from Europe reportedly decreased 16.7 percent y/y during the same period. The decrease was said to be partially caused by the Group’s decision to change its distribution model in Europe to drive profitable sales growth.

Other Regions revenue decreased 8.0 percent to ¥2,110.3 million for fiscal 2026, said to be mainly due to unfavorable local economic circumstances which in turn weakened consumer purchasing interest and power. On a constant-currency basis, revenue from Other Regions decreased 9.1 percent y/y during the same period.

Revenue from the Group’s home markets, namely Japan, Korea and China (including Hong Kong and Macau) accounted for 85.8 percent of the Group’s total revenue for fiscal 2026.

Channel Summary
The Group has an extensive sales and distribution network that allows it to address a broad customer base in its target markets. The Group’s sales and distribution network consists of Honma-branded self-operated stores as well as POSs owned and managed by third-party retailers and wholesalers. The Group’s third-party retailer and wholesaler partners include (a) Retailers, including various national and regional sports megastores, and (b) Wholesale Distributors that on-sell the Group’s products to other third-party retailers and consumers.

Self-Operated Stores revenue decreased by 6.2 percent y/y to ¥10,565.9 million for fiscal 2026. On a constant-currency basis, revenue from self-operated stores reportedly decreased 6.4 percent y/y during the same period. The decrease was said to be mainly caused by dissatisfactory retail sales performance in Japan where sales declined by 11.9 percent during the 2026 fiscal year. Revenue from Self-Operated Stores in Korea rose strongly by 34.3 percent as compared to the same period last year.

Third-Party Retailers and Wholesalers sales revenue increased 12.3 percent y/y to ¥11,693.8 million for fiscal 2026. On a constant-currency basis, revenue from Third-Party Retailers and Wholesalers increased by 12.7 percent during the same period. The increase was said to be primarily due to Wholesales revenue recovery in Korea and China (including Hong Kong and Macau) following continued investment into both markets and renewal of the Group’s distribution arrangement in Korea.

As compared to fiscal 2025, Wholesale revenue expanded 56.7 percent and 13.4 percent in Korea and China (including Hong Kong and Macau), respectively. Revenue from Third-Party Retailers and Wholesalers declined by 5.4 percent in Japan and by 8.9 percent in Rest of the World, as a result of continued channel optimization efforts and gloomy economic environment in some of the ASEAN markets.

Profitability and Expenses

Gross Profit
Gross Profit increased by 1.5 percent y/y for fiscal 2026 and reached ¥ 11,958.7 million ($79.4 million) as compared to ¥11,784.1 million for fiscal 2025. Gross profit margin slightly decreased by 70 basis points to reach 53.7 percent of revenue as compared to 54.4 percent for prior year. For fiscal 2026, Korea posted a steep gross margin improvement of 10 percentage points while Japan experienced a downward decline of 4.2 percentage points.

Golf Clubs gross profit increased by 0.6 percent to ¥8,995.1 million for fiscal 2026. Gross profit margin for Golf Clubs decreased from 59.4 percent for for fiscal 2025 to 57.1 percent for fiscal 2026, said to be primarily due to negative country mix. Gross profit margin for Japan lowered by 7.6 percentage points due to weakened Japanese yen and intensified market competition.

Golf Balls gross profit increased 49.4 percent y/y to ¥827.9 million for fiscal 2026. Gross profit margin for Golf Balls nicely improved from 27.4 percent of revenue for fiscal 2025 to 36.5 percent for fiscal 2026, said to be primarily due to improved country mix and continued price management efforts albeit continued downward cost pressure.

Apparel gross profit decreased by 4.0 percent from ¥1,673.4 million for the year ended 31 March 2025 to ¥1,606.3 million for fiscal 2026. Apparel gross profit margin increased from 53.4 percent for fiscal 2025 to 54.7 percent for fiscal 2026, said to be primarily due to tighter pricing policy and continued sourcing optimization.

Accessories and Other related products gross profit decreased by 13.6 percent from ¥612.7 million for the year ended 31 March 2025 to ¥529.4 million for fiscal 2026. Accessories and Other related products gross profit margin decreased from 42.3 percent in fiscal 2025 to 40.5 percent for fiscal 2026, said to be primarily due to compound impact from negative currency and custom duty impacts.

Other Income and Gains
Other income and gains increased significantly from ¥107.4 million in fiscal 2025 to ¥2,775.5 million for fiscal 2026, said to be primarily due to positive foreign exchange revaluation results following continued depreciation in the exchange rate between ¥ against other currencies.

Selling and Distribution Expenses increased from ¥9,650.9 million for the year ended 31 March 2025 to ¥10,103.6 million for fiscal 2026. Selling and distribution expenses as a percentage of revenue increased from 44.5 percent for the year ended 31 March 2025 to 45.4 percent for fiscal 2026. The following table sets forth a breakdown of selling and distribution expenses by absolute amounts and percentages of total selling and distribution expenses for the years indicated:

Administrative Expenses showed a similar increase and grew from ¥1,533.0 million for the year ended 31 March 2025 to ¥1,614.3 million for fiscal 2026, mainly due to increases in administrative personnel cost. Provision for Impairment Losses on Financial Assets Provision for impairment losses on financial assets stood at ¥219.9 million for fiscal 2026, as compared to a provision of ¥213.1 million for the year ended 31 March 2025, said to be primarily due to a slight increase in bad debt provisions. Other Expenses, Net Other expenses substantially decreased from ¥1,230.6 million for the year ended 31 March 2025 to ¥233.8 million for fiscal 2026, said to be primarily due to the absence of a material currency exchange loss. Finance Costs Finance costs increased slightly from ¥224.4 million for the year ended 31 March 2025 to ¥270.5 million for fiscal 2026, said to be primarily due to increased borrowing costs in Japanese yen.

Finance Income marginally lowered from ¥22.6 million for the year ended 31 March 2025 to ¥19.0 million for fiscal 2026. Profit Before Tax As a result of the foregoing, profit before tax for fiscal 2026 was ¥2,310.9 million. Income Tax (Expense)/Credit The Company incurred an income tax credit of ¥673.8 million for the year ended 31 March 2025 and recorded tax expense of ¥1,191.2 million for fiscal 2026. Profit for the Year As a result of the foregoing, net profit for fiscal 2026 was ¥1,119.8 million.

Net Profit increased to ¥1,119.8 million ($7.4 million) in fiscal 2026, up from a loss of ¥264.2 million for the 2025 fiscal year. Net operating cash flow reportedly remained positive and stood at ¥1,109.3 million ($7.4 million) for fiscal 2026. Net operating cash flow generated for the 2025 fiscal was ¥5,496.6 million.

Industry Outlook
The golf industry will continue to face multiple challenges in the year ending 31 March 2027. These challenges include intensified competition within the golf industry due to oversupply in some parts of the world, continued supply chain challenges as a result of labour shortage and increase of raw material price, and global economic and political uncertainties.

for fiscal 2026, the golf industry experienced intense competition as retailers struggled with inventories and sluggish consumer demand. The Company expects the overall golf industry to rapidly adapt itself to these challenges with short term negative impacts.

The Group also believes that the year ending 31 March 2027 will be a crucial period for it to deliver its business strategies amidst global economic and political uncertainties. The Group is confident in its ability to mitigate the adverse impacts of such uncertainties and will seize every possible opportunity to preserve cash, to optimize its operational efficiencies in order to foster a solid foundation for the mid – and long-term development with respect to its brand, products, distribution channel, employees and supply chain.

The Group endeavors to promote sustainable business development and strives to create long-term value for all of its shareholders. The Group will stay alert to the development of all external challenges. The Group will also continue reviewing its existing business strategies from time to time and take necessary actions to mitigate business risks while safeguarding the health and safety of its employees and teams.

Image, data and tables courtesy Honma Golf Limited