Goldwin's operating profit falls 82% in the first quarter as bad June weather hits summer sales

Goldwin's operating profit fell 82.1% year on year in its fiscal first quarter, to just ¥371 million, as poor June weather curbed sales of summer apparel, the company said in its quarterly financial results filing dated Aug. 6. Net sales dipped a comparatively modest 1.2%, to ¥23.59 billion.

Gross profit actually rose 0.8%, and the gross margin widened by 1.0 percentage point to 54.0%. But selling, general and administrative expenses jumped 17.1% to ¥12.37 billion, mainly on higher personnel costs tied to a revised human-resources system, wiping out the margin gain, Goldwin said.

By channel, directly run stores grew, led by outlets, with regular-priced stores also ahead of last year, and the company's own e-commerce site, Goldwin Online Store, gained on markdown-driven volume. Wholesale fell short of last year, partly a reaction to shipments that had gone out earlier than usual at the end of the previous fiscal year. Layered on top, unseasonable June weather left T-shirts, shorts and sandals moving slowly, prompting Goldwin to start its clearance sale about a week earlier than usual, from mid-June.

The operating-profit hit did not flow through fully to the bottom line: profit from its equity-method affiliate, South Korea's YOUNGONE OUTDOOR Corporation, rose 33.6% to ¥2.18 billion, softening the blow. Ordinary profit fell 30.9% to ¥2.60 billion and profit attributable to owners of the parent fell 29.5% to ¥2.25 billion.

First-half cut, full year held

Goldwin cut its forecast for the six months to Sept. 30 from the guidance it gave on May 13: net sales of ¥55.6 billion (down 7.2% from that forecast, flat year on year), operating profit of ¥4.2 billion (down 40.0%), ordinary profit of ¥7.0 billion (down 23.9%) and net profit of ¥5.4 billion (down 20.6%). It left its full-year forecast to March 2027 unchanged — net sales of ¥145.4 billion, up 5.7%, and operating profit of ¥26.1 billion, up 0.9% — arguing the shipment-timing effect and the June weather were specific to the first half, that the year is weighted toward autumn/winter sales, and that it will run measures tied to The North Face brand's 60th anniversary in Japan in the second half.

The gap between a barely-dented top line and a near-wipeout in operating profit is the real story: a cost and mix problem more than a demand collapse, with an already-widening margin undone by a personnel-cost rise Goldwin had planned for, layered onto a weather-driven miss on the season's most weather-sensitive items. Holding the full-year forecast is a bet that autumn and winter — which carry most of Goldwin's annual profit — arrive on schedule; the company's own filing names a mild winter as the clearest way that bet could still go wrong.