ENVALITH
日本毛織株式会社 logo

THE JAPAN WOOL TEXTILE CO., LTD.

3201・Prime Market・Textiles & Apparels

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日本毛織株式会社 logo
THE JAPAN WOOL TEXTILE CO., LTD.3201

Business

Nikke Group (Nippon Keori Kaisha, Ltd.) traces its roots to a long-established textile manufacturer founded in 1896, and now operates as a diversified corporate group comprising 57 consolidated subsidiaries and 3 equity-method affiliates. Its business spans four segments — Apparel & Textiles, Industrial Materials, People & Community Development, and Life & Living Distribution — while also cultivating a Medical business. In Apparel & Textiles, the group manufactures and sells wool yarn, woolen fabrics, and uniform materials; in Industrial Materials, it offers nonwoven fabrics, racket sports equipment, and FA (factory automation) equipment. The People & Community Development segment operates shopping centers, real estate leasing, and nursing/childcare services, while the Life & Living Distribution segment handles blankets, home appliances, and e-commerce sales. Major customers range broadly across schools, government agencies, automakers, retailers, and general consumers.

Business Model

In the apparel and textiles segment, the company operates a vertically integrated model spanning material manufacturing through sales, while the industrial materials segment is expanding scale through M&A in the nonwoven fabrics and FA equipment fields. The people and future development business secures stable, high-margin earnings (operating margin of 25.4%) through leasing and commercial facility operations using company-owned real estate. The lifestyle and distribution business combines an SPA model with e-commerce channels to capture consumer-facing revenue. The mutual complementarity among these four businesses—where underperformance in one segment is offset by others—has underpinned five consecutive periods of increased revenue and profit.

Company Strengths

Net sales for FY2025 were ¥119,377 million (up 3.4% year on year), operating profit was ¥11,913 million (up 2.3% year on year), and ordinary profit of ¥12,967 million and net profit attributable to owners of parent of ¥9,090 million both reached record highs. The company has achieved five consecutive years of increased sales and profit since FY2021, demonstrating the resilience of the group's overall earnings power.

The Human and Future Development business is a highly profitable segment, with net sales of ¥26,679 million and operating profit of ¥6,772 million, representing an operating margin of 25.4%. Company-owned commercial facilities (such as Nikke Colton Plaza and Nikke Park Town) and rental real estate generate stable earnings, and Yaesu-dori Filterras (which obtained ZEB Ready and ZEH certification), completed in January 2025, is expected to contribute to earnings from the next fiscal year onward.

With the full-year consolidated contribution of Kureha Tec Corporation (became a group company in August 2024) and Kankyo Techno Co., Ltd. (became a group company in April 2024), net sales in the Industrial Materials and Equipment business expanded 14.1% year on year to ¥35,177 million, and operating profit grew 45.8% year on year to ¥2,875 million. Furthermore, Kako Technos Co., Ltd. (became a group company in October 2025) strengthened the FA and equipment field.

ENVALITH's Perspective

In the first half of FY2026 (ending November 2026), operating profit in the Industrial Materials & Equipment business increased 20.9% year-on-year, recording the largest growth rate among all segments. The consolidation of Kako Technos Co., Ltd. has contributed to both sales and profit, providing numerical confirmation of the effectiveness of the M&A strategy. On the other hand, uncertainty remains in areas dependent on the external environment, such as the declining trend in FA equipment orders due to customers' restraint on capital expenditure and sluggish demand for environmental- and energy-related materials. Attention will focus on trends in the second half, when the full-year consolidation contribution begins in earnest.

The Apparel & Textiles business posted net sales of ¥13,682 million (down 0.7% year-on-year) and operating profit of ¥280 million (down 36.8% year-on-year) in the first half, marking a significant decline in profit. The main cause is excess distribution inventory of school uniforms, a issue that has persisted since the previous period, exposing a structural challenge dependent on the industry-wide inventory adjustment cycle as an external factor. While textiles for the US and European markets and materials for government and public office uniforms performed well, the timing of recovery in school uniform materials will be a key variable in achieving full-year results.

In the first half of FY2026 (ending November 2026), expenditure on treasury stock acquisition reached ¥3,956 million, a significant increase from ¥0 million in the same period of the previous year. The treasury stock balance expanded from ¥7,430 million to ¥11,358 million, confirming a strengthened stance on shareholder returns. Meanwhile, the equity ratio remained at a high level of 69.3%, leaving substantial room for the utilization of financial leverage. Net assets per share steadily increased to ¥2,078.78 (from ¥1,964.90 at the end of the previous period), and the continuation of capital policy aimed at improving ROE will be a point of divergence in investor evaluation.

Growth Strategy

Promoting M&A, real estate redevelopment, e-commerce enhancement, and overseas sales expansion across four business segments, the company aims to renew record-high profits in the final year of the RN130 Vision.

Kako Technos Co., Ltd. and Suntec Co., Ltd. were consolidated from Q1, contributing to sales and profit in the FA equipment and materials field. Interim Industrial Materials segment sales rose 11.6% year on year to ¥19,623 million. In the second half, the full-year consolidation contribution will materialize more fully, and further scale expansion is expected.

"Yaesu-dori Filterrace (Chuo-ku, Tokyo)" and "SEAVE Shukugawa (Nishinomiya City, Hyogo Prefecture)," both completed in 2025, began contributing substantially to rental revenue from the interim period. Since no opening-related expenses associated with completion arose in the current period, this contributed to higher sales and profit. High occupancy rates are being maintained, securing stable revenue.

As the final year of the final phase of the medium- to long-term vision "RN130 Vision," the company aims to renew its record-high sales and profit levels. The full-year forecast remains unchanged at sales of ¥130,000 million (up 8.9% year on year), operating profit of ¥13,000 million (up 9.1%), and net income of ¥9,500 million (up 4.5%). Interim progress rates stood at 45.9% for sales and 43.0% for operating profit.

Due to the ongoing effect of excess distribution inventory of school uniforms carried over from the previous period, interim operating profit in the Textile business declined 36.8% year on year to ¥280 million. The company aims to leverage strong performance in textiles for overseas markets and materials for government and public institution uniforms while achieving a recovery in the second half through normalization of distribution inventory.

In the interim period of FY2026 (ending November 2026), the company conducted share buybacks totaling ¥3,956 million (a significant increase year on year). The interim dividend was raised to ¥18 per share (from ¥17 in the same period last year), and the full-year dividend forecast is ¥50 per share (up from ¥47 in the previous period). Net assets per share steadily increased to ¥2,078.78, and efforts to improve capital efficiency continue.

Last updated: July 17, 2026