7416.T

Overall Company Milestone & Core Vision

• Haruyama Holdings marks its 70th anniversary since founding, with 370 total group stores as of the end of March 2025, down from 445 stores at the end of March 2021 via consolidation of the store network. Sales per employee have recovered post-COVID-19.
• The company's core vision is "Becoming stores needed by local communities", anchored by the strategic theme "Shin-HARUYAMA", which targets four core pillars: Trust, Evolution, Confidence, and New to drive corporate cultural transformation.

Operational Achievements

• Capital structure improvement: Long-term debt was reduced by 1.456 billion yen year-over-year, total liabilities fell by 4.063 billion yen, total assets decreased by 3.841 billion yen, and equity ratio improved from 50.6% to 55.6%, strengthening financial safety to support future growth investment.
• Store network optimization: In FY2025 March, 9 new stores opened, 13 stores closed; 7 of these changes were relocations/brand changes to adjust store layouts to match shifting consumer demand, including expanding women's and business casual sales floors to improve conversion. Over 120 stores were renovated or repaired in the fiscal year.
• In-store service expansion: 10 additional "Hotto Hitoiki Stations" (health-focused monthly membership relaxation spaces) were added, bringing the total to 61 locations. Usage of these stations increased 19.8% year-over-year, and management links this growth to the solid performance of women's apparel sales.
• Shareholder return & IR improvement: The company launched a share buyback program capped at 700,000 shares, and implemented a 4.5 yen per share commemorative dividend for the 70th anniversary, bringing total annual dividend to 20 yen per share (15.5 yen regular + 4.5 yen commemorative). The corporate website was fully renewed in December 2024, and website access increased 7.6% year-over-year in the three months post-renewal; earnings materials are now distributed via multiple IR channels.

Strategic Priorities

1. Restructuring Products & Services
   • Focus on the "NEW BIZ WEAR" keyword to strengthen business casual product sales across all business divisions. Haruyama division expands high-functional stretch/quick-dry products and recovery wear; P.S.FA division emphasizes trend-forward business casual; TRANS CONTINENTS expands product lines for fashion-conscious business professionals, with expanded women's soft suit and innerwear offerings and larger business casual sales floors; Foel (plus-size apparel) expands its customer-centric +LABO product line and adds heat-adapted apparel for longer, hotter summers.
2. Accelerate Digital-driven Business Reform
   • Launched a new EC-only apparel brand "Muscat" to create new customer touchpoints for daily casual wear. Introduced cross-channel services including "EC order, in-store payment", where customers can order out-of-stock items online in-store, pay at checkout, and receive delivery to their home. Strengthened product offerings on third-party EC platforms including ZOZOTOWN and Amazon to continue growing EC sales.
3. Strengthen Store Competitiveness
   • Continue to renovate stores to shift from traditional suit-focused layouts to expanded business casual and women's apparel sales floors. Prioritize the subletting business to effectively utilize excess store real estate and parking lots, generating non-apparel revenue.
4. Corporate Reform & New Structure
   • A new management leadership structure will take effect after the June 2025 shareholder meeting, with the current chairman returning as the representative director to lead group strategy. A new new business development department has been launched, with new dedicated M&A and health product development sections to enter new business areas and accelerate digital transformation.

• For FY2026 March, management guides consolidated net sales of 37.5 billion yen, representing a 3.8% year-over-year increase, driven by strengthened sales of business casual and women's apparel, EC growth, and expanded "Hotto Hitoiki Station" rollout to improve store competitiveness.
• Management guides ordinary profit of 1.0 billion yen, representing a year-over-year increase, returning to growth after the FY2025 profit decline driven by increased investment.
• The company plans to maintain a stable annual dividend of 15.5 yen per share for FY2026 March, continuing its baseline policy of stable dividend payout as a core management priority.
• Store network optimization will continue in FY2026, with additional relocations to improve store competitiveness and further exit unprofitable stores. 3 additional "Hotto Hitoiki Stations" are planned to be added, with content and interior updates for existing locations.

The call transcript does not provide separate absolute financial performance or revenue contribution percentage data for each individual product/brand segment (Haruyama, P.S.FA, Foel, TRANS CONTINENTS, Moriwan World, Mid International). Aggregate consolidated results are as follows: Total consolidated net sales for FY2025 March was 36.135 billion yen, up 0.6% year-over-year, driven by solid performance in women's apparel sales and the fresh graduate recruitment season sales campaign. EC sales increased 4.5% year-over-year, and the EC sales share of total revenue has grown continuously over the past four years. On a same-store basis, full-year sales reached 101.3% of the prior year level, customer traffic was 97.3% of the prior year level, and average customer transaction value was 103.9% of the prior year level. Ordinary profit was 0.964 billion yen, down 23.3% year-over-year due to increased selling, general and administrative expenses. Net income attributable to parent company shareholders was 0.67 billion yen, up 65.2% year-over-year, as there was no repeat of the 0.459 billion yen extraordinary loss from discontinued system development recorded in the prior year.

• Persistent rising raw material costs continue to put pressure on gross margins, even as ongoing pricing adjustments have supported average transaction value growth. Gross profit margin declined 0.4 percentage points year-over-year in FY2025, leading to a 0.152 billion yen profit decrease.
• Climate change impacts have created headwinds for customer traffic: unseasonable weather in early spring and prolonged extreme heat delayed autumn apparel demand, leading to a 2.7% full-year decline in same-store customer traffic.
• The company's price-to-book ratio remains at 0.4x, well below the 1x level, and the company has identified improving profitability and restoring sustainable growth as key priorities to address this undervaluation.
• The company's core business wear market is undergoing structural change, requiring a deliberate shift from traditional suit-focused offerings to business casual that demands continued investment and operational adjustment.

The provided transcript only lists the topics of two planned questions (strong-performing products in the prior fiscal year, and outlook for effective utilization of store real estate) but does not include the full text of the questions or management's answers. No complete Q&A exchanges are available for summary.