NAGAHORI CORPORATION

Business Details

The core segment engaged mainly in the manufacture and sale of jewelry, accounting for 99.5% of the Group's consolidated net sales. In addition to procurement from overseas and domestic suppliers, the segment conducts in-house manufacturing at consolidated subsidiaries. Sales are conducted through both wholesale and retail channels, catering to a wide range of customers from affluent individuals to general consumers via diverse channels such as department stores, shopping malls, and general merchandise stores (GMS). During the fiscal year, the Group made Sho Co., Ltd. a subsidiary through M&A, gaining access to the Sapporo department store channel. Against the backdrop of soaring gold prices, sales of bullion products increased substantially, which also led to an increase in in-house manufacturing within the Group.

Recent Overview

Net sales increased 28.4% and profit more than doubled (up over 150%), driven by soaring gold prices and the effect of the subsidiary acquisition

In the Jewelry Business for FY2026 (ending March 2026), net sales achieved substantial improvement, reaching ¥29,227 million (up 28.4% year on year), with segment profit of ¥1,648 million (up 150.4% year on year). The rapid expansion of demand for bullion products, driven by the sharp rise in gold prices, drove sales across Group companies and also led to increased in-house manufacturing within the Group. In addition, the Group expanded its sales network by making Sho Co., Ltd., which operates the Sapporo department store channel, a subsidiary through M&A. On the other hand, an impairment loss of ¥49 million was recorded in the Jewelry Business. During the fiscal year, sales to any single customer fell below 10% of consolidated net sales, indicating further progress in customer diversification compared to the prior fiscal year.

Key Products

Growth Drivers

• Profit contribution from expanding demand for bullion products amid soaring gold prices and increased in-house manufacturing within the Group
• Expansion of the sales network through the M&A-based acquisition of Sho Co., Ltd. as a subsidiary (gaining the Sapporo department store channel)
• Strengthened sales activities such as proprietary and customer events, under the policy of 'selection and concentration' targeting the affluent market
• Nurturing of core luxury brands (NADIA, DAVID MORRIS, SCAVIA) and strengthening of product competitiveness and brand power
• Expansion of overseas sales networks and enhanced response to overseas demand
• Strengthened earnings capacity through in-house production of sales merchandise under the medium-term management plan 'Beyond Growth'

Risks

• Risk of fluctuations in precious metal bullion prices (rising gold prices promote bullion product sales but can also increase manufacturing costs)
• Risk of sluggish personal consumption due to continued high prices (particularly weakening demand for mid-tier products)
• Impact of geopolitical risks, such as US trade policy and the Middle East situation, on demand for jewelry products
• Risk of continued shareholder-response costs (advisory fees) related to large-scale share acquisitions by Re Generation Co., Ltd. and others
• Inventory risk and cash flow deterioration risk associated with the significant increase in inventories (up ¥2,248 million during the fiscal year)
• Risk of rising financial leverage and interest rate increases due to a substantial rise in short-term borrowings (net increase of ¥3,140 million)
• Risk of declining profitability of fixed assets, as evidenced by the impairment loss (¥49 million) recorded in the Jewelry Business