HONEYS HOLDINGS CO., LTD.

Business Details

The domestic women's apparel business operated by Honeys Holdings Co., Ltd. and its consolidated subsidiary Honeys Co., Ltd. Under the key concept of "high sensitivity, high quality, reasonable price," the segment operates in-shop stores mainly in large suburban shopping centers and station buildings nationwide. Most products are self-planned, employing an SPA model manufactured at the company's own factory in Myanmar and overseas contract manufacturing plants. The segment also operates its own e-commerce site, selling to a broad range of female customers across age groups through both physical stores and EC. From the current fiscal year, the Myanmar segment has been integrated, resulting in a change to a single reportable segment of Japan.

Recent Overview

Both revenue and all profit levels declined, with impairment losses doubling year on year

In FY2026 (ending May 2026), net sales were ¥56,182 million (down 2.6% year on year) and operating income was ¥4,619 million (down 21.8% year on year), representing a substantial decline in profit. While the number of items purchased per customer improved somewhat due to more reasonable pricing, customer traffic remained sluggish; the extended summer season through mid-October led to weak proper-price sales of autumn merchandise, and inventory adjustments for spring items were carried out in the second half. Gross profit margin fell to 58.9% (down 0.3 points year on year) due to rising procurement costs from yen depreciation and an increased proportion of sale-priced merchandise. Impairment losses doubled to ¥452 million from ¥224 million in the prior period. In addition, the Myanmar segment was integrated from the current period, resulting in a change to a single reportable segment. The medium-term management plan (FY2026 (ending May 2026) - FY2028 (ending May 2028)) was also revised.

Key Products

Growth Drivers

• Continued growth of the EC business (improved usability, SNS utilization, and enhanced OMO strategy driving improved in-store pickup services and new member acquisition)
• Stable product supply and cost competitiveness maintained through a high ASEAN production ratio and utilization of the company's own factory in Myanmar
• Improvement in items purchased per customer and average customer spending through pursuit of appropriate pricing and added value
• Optimization of the store portfolio through scrap-and-build and flexible product placement suited to location conditions
• Expectations of a gradual recovery in personal consumption backed by improving income conditions amid continued wage increases

Risks

• Rising procurement costs due to continued yen depreciation (although the balance of forward exchange contracts has increased, continued yen weakness would sustain upward pressure on procurement costs)
• Sluggish customer traffic and bifurcation of consumption stemming from consumers' continued thrift-conscious spending amid rising prices
• Loss of sales opportunities and inventory adjustment costs for seasonal merchandise (particularly autumn and spring outerwear) due to temperature fluctuations and unusual weather
• Rising SG&A expenses from wage increases and higher EC-related advertising costs, cashless payment fees, and system operating costs (SG&A ratio rose 1.7 points year on year to 50.7%)
• Risk of deteriorating profitability at existing stores, as evidenced by the increase in impairment losses (from ¥224 million in the prior period to ¥452 million in the current period)
• Rising procurement costs and delivery schedule volatility from higher crude oil prices and ocean freight costs due to instability in the Middle East
• Risk of higher-than-expected store exit costs, exemplified by the ¥175 million increase resulting from a change in the estimate of asset retirement obligations (due to construction cost inflation, etc.)