Goldwin, Inc, the owner of the rights to The North Face brand in Japan and Korea, has lowered its forecast for the fiscal 2027 first half period ended September 30, 2026 after reporting a shortfall in its business in the fiscal first quarter ended June 30, 2026.
At issue is not just the net sales decline in the quarter – down 1.2 percent year-over-year (y/y) to ¥23.5 billion – but also the 7.3 percent shortfall against the plan for the quarter. In addition, the company reported higher SG&A expenses for the first quarter, which came in 17.1 percent higher y/y but also came in slightly above plan, driving operating profits further south.
The Tokyo, Japan-based company, which first began importing The North Face into Japan in 1978 and acquired its Japanese and South Korean trademark rights in 1995, said net sales declined due to sluggish with in-store sell-through of summer merchandise at wholesale retail outlets. The ¥1.8 billion overall shortfall for the quarter against the plan reportedly occurred in TNF Apparel and GB (Global Brands, etc.). According to a fiscal Q1 investor presentation, the year-over-year difference reportedly reflects a scenario where Goldwin goods offset the decline in TNF Apparel revenue.
Operating profit for the fiscal quarter amounted to just ¥371 million, compared to ¥2,079 million in Q1 last year and ¥1,734 planned for the fiscal Q1 period this year. The profit decrease was owed to the allocation of SG&A expenses to support growth.
The revised plan (forecast) for the first half ended September 30, 2026 has the company meeting 98.2 percent of its new sales plan (¥55.6 bn) for the period by cutting the plan by ¥4.3 billion from the previous H1 plan, while the SG&A expenses plan was bumped up ¥100 million to ¥25.2 billion for the first half, or growth of 16.7 percent year-over-year.
Much the same was done with the operating profit and ordinary profit plans for the first as shown below in the chart provided (below) by Goldwin in its Q1 presentation.
Fiscal 2027 First-Half Sales and Earnings Forecast Revisions
Goldwin management explained the reasoning for the downward revision based on their anticipation of a “continuation of factors contributing to the slowdown in Q1.” They also said they plan to execute growth -related capital expenditures as planned.
One thing that did not change was the annual dividend forecast, which remained at ¥70.
“While the forecast remains unchanged at this time, we will carefully review the target levels and the path to achieving them to determine whether adjustments are necessary, and plan to announce our direction in November,” Goldwin said during its Q1 earnings presentation.
The five-year medium term plan is also under review and is currently unchanged.
Consolidated Financial Results Trend
First Quarter Monthly Net Sales
In addition to the decline in inbound demand from mainland China that has continued since the previous quarter, sales fell short of internal projections due to sluggish sales of summer merchandise in June.
Image courtesy Goldwin, Inc.
