GUNZE (3002): FY2025 Results Summary — Net Profit Plunges on Apparel Restructuring

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: GUNZE does not publish an English results presentation; this article is an English translation of the Japanese-language article on our sister site Investalk, which is based on the company’s Japanese-language IR materials, with figures transcribed as reported. The company labels this fiscal year “2026年3月期” (the fiscal year ended March 31, 2026); it is classified here as FY2025 per site convention, while the tables retain the company’s own period labels.

For the fiscal year ended March 31, 2026 (its 130th term), GUNZE reported consolidated net sales of 130,918 million yen (down 4.5% year on year), operating profit of 4,882 million yen (down 38.4%), ordinary profit of 4,920 million yen (down 39.9%), and profit attributable to owners of parent of 509 million yen (down 91.9%). Net sales declined due to the sales impact of electronic components whose business was wound down at the end of the previous fiscal year, lower overseas sales of plastic films, and reduced apparel sales through existing routes such as mass retailers.

Consolidated Results (Full Year)

Operating profit and ordinary profit declined due to the impact of inventory valuation losses in the Apparel business, which is undergoing structural reform, as well as stagnant sales in China and higher fixed costs and other factors in the Medical business. Profit attributable to owners of parent decreased by 5,769 million yen, largely reflecting business structural reform expenses recorded in the Apparel business in the first quarter. As a main extraordinary item, the company recorded apparel business structural improvement expenses of △3,311 million yen.

Item	FYE Mar 2026	FYE Mar 2025	YoY Change
Net sales	130,918	137,117	△6,199 (△4.5%)
Operating profit	4,882 (3.7%)	7,921 (5.8%)	△3,038 (△38.4%)
Ordinary profit	4,920 (3.8%)	8,180 (6.0%)	△3,260 (△39.9%)
Profit attributable to owners of parent	509 (0.4%)	6,279 (4.6%)	△5,769 (△91.9%)

Segment Results

In Functional Solutions, net sales fell by approximately 2.9 billion yen due to the wind-down of electronic components, but operating profit improved and rose. In Medical, although domestic sales of absorbable products such as anti-adhesion materials expanded, profit declined due to stagnant sales in China and higher fixed costs. In Apparel, in addition to lower sales through existing routes such as mass retailers, the company recorded valuation losses on inventory becoming discontinued under its focus-and-specialization strategy at fiscal year-end, resulting in lower sales, lower profit, and an operating loss. In Life Creations, net sales and profit rose on higher visitor numbers from commercial facility renovations and improved profitability at sports clubs.

Segment	Net Sales (FYE Mar 2026)	Operating Profit or Loss (FYE Mar 2026)	YoY Change (Operating Profit)
Functional Solutions	47,543	7,234 (15.2%)	28
Medical	13,197	1,474 (11.2%)	△956
Apparel	58,597	△1,334 (△2.3%)	△2,087
Life Creations	12,530	1,232 (9.8%)	243
Total	130,918	4,882 (3.7%)	△3,038

Full-Year Forecast

For the fiscal year ending March 31, 2027, the company expects higher net sales as sales expand in businesses other than Apparel. Operating profit and ordinary profit are expected to increase on earnings improvement from structural reform in the Apparel business, improved global profitability of plastic films, and a recovery from the inventory-adjustment phase for semiconductor-related products in Engineering Plastics. Profit attributable to owners of parent is expected to improve substantially.

Item	FYE Mar 2027 (Forecast)	FYE Mar 2026 (Actual)	Change
Net sales	132,000	130,918	0.8%
Operating profit	8,800 (6.7%)	4,882 (3.7%)	80.3%
Ordinary profit	8,400 (6.4%)	4,920 (3.8%)	70.7%
Profit attributable to owners of parent	5,200 (3.9%)	509 (0.4%)	921.6%

Shareholder Returns

The year-end dividend for the fiscal year ended March 31, 2026 was 216 yen per share (as announced on May 14, 2025). For the fiscal year ending March 31, 2027, the company plans a dividend of 216 yen per share (an ordinary dividend of 147 yen and a special dividend of 69 yen), with a policy targeting a payout ratio of around 50%. In fiscal 2025, the company acquired 1,153,400 treasury shares for 4,999,956 thousand yen and retired 3,000,000 shares of common stock as of March 31, 2026.

Item	Details
Year-end dividend, FYE Mar 2026 (Actual)	216 yen per share
Dividend, FYE Mar 2027 (Planned)	216 yen per share (ordinary dividend 147 yen, special dividend 69 yen)
Dividend policy	Target payout ratio of around 50%

Priority Business Directions

In the Apparel business, against an operating profit/loss improvement target of 3.3 billion yen (from fiscal 2024 to fiscal 2027), the company plans to achieve 93% of the target in fiscal 2026. It is advancing a review of its brand portfolio and value-chain reform under its focus-and-specialization strategy, along with the consolidation of domestic production and logistics bases. In the Medical business, the company is addressing the stalled growth of its China operations and scaling back its aesthetic medicine business, aiming for an early recovery of its operating margin to 20%.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.