CROSS PLUS INC.

Business Details

The CROSS PLUS Group possesses top-class planning and production capabilities in the women's apparel industry, with Apparel Wholesale (for specialty stores, mass merchandisers, and non-store retailers) as its core business, alongside Lifestyle Wholesale (drugstores, convenience stores, etc.) and retail operations through directly-operated stores and e-commerce. The group includes 5 consolidated subsidiaries (such as Third Office, which handles men's apparel, and I.S. Link, which handles cosmetics). Given the high proportion of the clothing business, segment information disclosure has been omitted.

Recent Overview

The first quarter saw a significant decline in both sales and profit, primarily due to struggles in the Apparel Wholesale business

In the first quarter of FY2027 (ending March 2027) (February to April 2026), net sales were ¥15,499 million (down 3.0% year-on-year), and operating profit fell sharply to ¥347 million (down 56.8% year-on-year). While Apparel Wholesale declined to ¥11,248 million (down 7.9% year-on-year) due to a delayed recovery in sales to suburban-type specialty stores, Retail grew to ¥3,117 million (up 13.1% year-on-year) and Lifestyle Wholesale grew to ¥1,022 million (up 14.8% year-on-year). Profit was squeezed by a decline in gross profit margin due to rising procurement costs (28.0% in the same period previous year to 27.4% in the current period) and an increase in selling, general and administrative expenses (from ¥3,674 million to ¥3,894 million) due to higher personnel costs, logistics costs, and sales commissions. Comprehensive income was negative ¥58 million. The full-year earnings forecast remains unchanged.

Key Products

Growth Drivers

• Continued expansion of the retail channel (up 13.1% in the first quarter): growth of the general merchandise shop "Join Park" and strong performance of "Cross Function" occasion-wear items on e-commerce
• Growth of the e-commerce channel (¥817 million in the first quarter, up 15.3% year-on-year) and strengthened marketing using social media and video content
• Expansion of Lifestyle Wholesale (up 14.8% in the first quarter): expanded sales of the in-house brand "Yoki" and the new launch of sales for the Korean nail brand "Dashing Diva"
• Strengthening of the functional fashion brand "Cross Function" and expansion of the men's business
• Efforts to improve profitability based on the medium-term management plan built around the twin pillars of apparel and lifestyle
• Recovery efforts in the second half aimed at achieving the full-year net sales forecast of ¥63,000 million (up 5.3% year-on-year)

Risks

• Delayed recovery in sales to suburban-type specialty stores within the Apparel Wholesale business (first-quarter specialty store channel sales of ¥7,608 million, down 8.3% year-on-year)
• Rising procurement costs and declining gross profit margin due to continued yen depreciation and labor shortages driving up raw material prices
• Weakening personal consumption and sluggish apparel demand due to prolonged price increases
• Upward pressure on selling, general and administrative expenses from rising personnel costs, logistics costs, and sales commissions
• Impact on the global economy from instability in international affairs, including US policy developments and the situation in the Middle East
• Risk of decline in the fair value of investment securities (¥5,580 million at the end of the first quarter, down ¥727 million from the end of the previous fiscal year)
• Dependence on sales to the major customer Shimamura Co., Ltd. and a declining trend in sales to that company