HUMAN MADE Inc.

Business Details

Under the theme of "fusion of past and future," the company plans and produces apparel and lifestyle products with an emphasis on high-quality materials and detail, and sells them globally through its own e-commerce, own stores, and wholesale channels. It achieves high profit margins through a unique pricing policy that maintains a 100% full-price sell-through rate with no sales or discounting whatsoever, and through SNS-driven promotions via collaborations with renowned creators and brands. The company is accelerating its overseas expansion while capturing inbound demand.

Recent Overview

Recorded Q1 net sales of ¥4,299 million and operating profit of ¥1,233 million; basic agreement reached toward acquisition of UNDERCOVER

In Q1 of FY2027 (ending January 2027) (February to April 2026), the company recorded net sales of ¥4,299 million, operating profit of ¥1,233 million, and net income for the quarter of ¥870 million. Domestically, it opened a store in Kobe, and overseas, it opened a new store in Thailand (Bangkok). The company is also expanding the number of SKUs and inventory of essential items. As a subsequent event, on June 15, 2026, the company entered into a basic agreement toward acquiring all shares of Undercover Co., Ltd., which operates the designer brand "UNDERCOVER" (acquisition price not yet determined; share transfer execution scheduled for February 2027). In addition, the company plans to issue 20,722 shares of restricted stock compensation (issue price of ¥1,355 per share, total issue amount of ¥28 million) to three internal directors. The full-year earnings forecast remains unchanged (net sales of ¥18,500 million, operating profit of ¥4,800 million).

Key Products

Growth Drivers

• Continued expansion of inbound demand (against a backdrop of yen depreciation and a year-on-year increase in the number of foreign visitors to Japan)
• Expansion of customer touchpoints through increased SKUs and inventory of essential items (T-shirts, innerwear, etc.)
• Improved brand recognition through collaborations with renowned creators and global brands
• Expansion of operating areas through new domestic store openings (Kobe) and new overseas store openings (Bangkok, Thailand)
• Establishment of local subsidiaries in China (Renchengchuang (Shanghai) Fashion Co., Ltd.) and the US (HUMAN MADE USA Inc.) to build an overseas direct sales system
• Cultivation of a second earnings pillar through the acquisition of Undercover Co., Ltd. (UNDERCOVER brand) (scheduled to become a consolidated subsidiary from Q1 of FY2028 (ending January 2028))
• Continuation of high gross profit margin (64.8% in Q1 actual) through maintaining full-price sales of high value-added products

Risks

• Risk of a sharp decline in inbound demand (due to exchange rate fluctuations, geopolitical risk, infectious disease, etc.)
• Supply constraints and lost sales opportunities arising from the small-batch, high-variety production model
• Temporary slowdown in profit growth due to increased one-time expenses associated with accelerated overseas expansion (subsidiaries in China and the US, store opening in Thailand, etc.)
• Goodwill and integration risks associated with the acquisition of Undercover Co., Ltd., and uncertainty regarding financial impact due to the undetermined acquisition price
• Risk of brand equity impairment (scandals involving collaboration partners, counterfeit goods, SNS controversies, etc.)
• Risk of increased procurement costs due to fluctuations in US trade policy (tariffs), etc.
• Country risk and operational risk associated with the establishment of local subsidiaries in China and the US
• Risk of reduced purchasing willingness among domestic consumers due to price increases centered on daily necessities