Goldwin, which owns the rights to The North Face in Japan and Korea, reported flattish sales in the fiscal third quarter ended December 31, impacted by reduced tourist traffic and unseasonably warm December weather in Japan.
Sales in the third quarter ended December 31 climbed 1.0 percent to ¥43,882 million ($279 mm) from ¥43,465 million. Operating profit was about flat, up 0.3 percent, to ¥11,758 million ($75 mm) from ¥11,725 million a year ago.
Earnings slid 14.0 percent in the third quarter to ¥8,453 million from ¥9,829 million ($63 mm) due to a decline in profit from Youngone Outdoor Corp.
In the nine months, sales reached ¥99,272 million, up 2.7 percent. Operating earnings rose 10.5 percent to ¥18,717 million. Net profit was down 13.8 percent to ¥15,251 million.
In a statement, Goldwin President and CEO Takao Watanabe said, “In the third quarter of the fiscal year ending March 2026, the fall/winter sales season followed a different trajectory than usual as consumers remained cost-conscious due to factors such as inflation, along with impacts from temperature fluctuations and inbound travel.
“In particular, October and November saw sharp temperature drops due to cold fronts, leading to a solid start to sales of fall/winter merchandise. Additionally, Black Friday in late November also boosted spending, resulting in an earlier sales peak.
“In December, however, primarily at urban stores in Japan, a decline in inbound sales from mainland China, combined with warmer-than-usual temperatures, slowed the sales of heavy apparel such as high-loft down jackets. However, sales performance diverged even within the jacket category, with mid-layers such as fleeces, shell jackets, and insulated jackets, items suitable for layering, and the Nuptse Jacket, The North Face’s classic down jacket, all showing strong growth.
“Despite these circumstances, we have been proposing highly functional products while advancing initiatives to enhance in-store customer experience by such means as opening self-operated stores and expanding existing stores. As a result, the cumulative net sales reached 99.472 billion yen (102.7 percent year-on-year), and the operating profit reached 18.717 billion yen (110.5 percent year-on-year), achieving revenue and profit growth year-on-year. In addition, the gross profit margin improved from the previous year to 53.5 percent.
“The ordinary profit and the quarterly profit attributable to owners of the parent declined year-on-year. The primary factor was a decline in our share of profit from Youngone Outdoor Corporation, our affiliate in Korea, which accounted for under the equity method, which experienced a profit decrease due to foreign exchange fluctuations and cost increases, despite maintaining sales growth. This factor resulted in a decline in consolidated profit, although our domestic operations achieved profit growth.
“We will continue to enhance our product planning and merchandising precision in response to climate patterns and demand changes, maximize sales opportunities, and strengthen the sales structure without relying on excessive markdowns. We sincerely ask for your continued understanding and support.”
In its financial statements, Goldwin said due in large part to the weather trends, “short-length down jackets were popular as an easy-to-match style against the backdrop of changes in consumer style preferences. Among The North Face’s classic down jackets, the Nuptse jacket saw a double-digit increase compared to the same period of the previous fiscal year. On the other hand, some classic down jackets fell below the previous fiscal year’s levels, resulting in a disparity among popular models within the same category . This led to a situation where sales performance was relatively weak in some major channels, including directly managed stores.
“Items such as fleece and other intermediate clothing items, as well as those that meet layering demand, remained relative stable despite the warm winter trend that began in December. In addition, as for gear items, the demand for ski-related items supported by the arrival of the winter seasons also provided a boost, allowing the company to achieve an increase in net sales in comparison to the same period of the previous disco year.”
The financial filing noted that in the nine months, gross margins improved 150 basis points to 53.5 percent, “thanks to the optimization of cost design at the procurement stage and selective price revisions, as well progress on inventory clearance.”
SG&A expense was up 3.1 percent due to higher advertising expenses, rent expense and other business operation costs.
Goldwin’s statements noted that at the close of the third quarter it operated 106 The North Face stores, 15 Goldwin locations and 50 stores under its other owned and licensed brands.
Goldwin’s owned and licensed brands also include Helly Hansen, Woolrich, Icebreaker, Macpac, Fischer, Sunski, Neutralworks, Play Earth Kids, Canterbury, Speedo, And Per Se, Allbirds, and Profecio.
Image courtesy The North Face
