To all of our shareholders, I would like to extend my deepest gratitude for your continued and exceptional level of support.
During the consolidated fiscal period under review, we achieved an operating profit of JPY 371 million, making this the first return to positive consolidated operating profit in 13 fiscal periods. This result exceeded the target consolidated operating profit of JPY 365 million that was defined as part of our first medium-term management plan.
For FY 2026, as the final year of our first medium-term management plan, "Innovation and Evolution," we are on track to achieve the targets therein, and as the first year of our second medium-term management plan, "Evolution and Leap Forward," we are establishing a strong foundation for further growth.
To all of our shareholders, I humbly ask for your continued, steadfast support as we continue on our path of innovation and evolution, and assure you that you can expect to see even greater progress being made by the Daidoh Limited Group.
Status of operations for the current fiscal term (the period ending March 31, 2026)
During the consolidated fiscal year under review (April 1, 2025, through March 31, 2026), the economy in Japan benefited from improvements in employment and income, while on the other hand, factors such as international instability, tariffs in the United States, and price rises of goods including food and energy continued to contribute to an uncertain state of affairs.
Japan Blue Co., Ltd, which became a consolidated subsidiary in August 2025, continued to demonstrate growth at a pace exceeding our expectations at the time that the denim-based product brands Momotaro Jeans and Japan Blue Jeans were acquired. During the consolidated fiscal year under review, these businesses were included in the results for the half-year period beginning from the third consolidated fiscal quarter and were a significant contributor to consolidated operating profit.
The Brooks Brothers brand benefited from product development and collaborative projects for the Japanese market, resulting in solid sales growth. Even so, profit decreased compared to the previous fiscal period due to factors that include increases in discount sales campaigns aimed at achieving sales targets for the spring and summer seasons.
At our Pontetorto apparel materials manufacturing subsidiary in Italy, while changes in market conditions resulted in a temporary stagnation in business performance, we are beginning to observe a steady recovery from the current fiscal period driven largely by sports apparel.
Sales for the New Yorker brand declined substantially compared to the previous fiscal year, particularly at outlet stores. As a result, we carried out a large-scale closure of unprofitable store locations at the end of the fiscal year. In addition, in March 2026 we launched the new label Park Slope New Yorker with an aim to expand our customer reach via outlet stores and e-commerce, an initiative that has been well received by customers.
As a result of the above, we achieved sales of JPY 29,265 million for the apparel business (an increase of 15.7% compared to the previous fiscal period) and a profit for the segment (operating profit) of JPY 759 million (compared to operating losses of JPY 37 million during the previous fiscal period). This marked the apparel business's first return to operating profitability in seven fiscal periods.
Turning to the real estate and leasing business, we celebrated the 25th year of operation of Dynacity, our shopping center in Odawara. This facility continues to serve as a stable source of revenue for the Daidoh Limited Group.
In an aim to improve efficiency of capital, the corporate real estate division sold a hotel located in Tokyo’s Chiyoda ward in March 2025 and an office building located in Tokyo’s Bunkyo ward in September 2025, which together resulted in lower revenue and profit. Regarding the transfer value of real estate, we are seeking to maximize corporate value through efforts to assure growth investments (including mergers and acquisitions) and shareholder returns for the current period.
Furthermore, with respect to full-company revenue and full-company costs that are not allocated to one of the reported segments, the JPY 228 million of costs related to the acquisition of Japan Blue Co., Ltd. was accounted for as selling, general, and administrative expenses. These costs occurred under extraordinary circumstances during the consolidated fiscal year under review, and are not expected to occur during the next consolidated fiscal year.
As a result of the above, the Group posted the following financial results for the current consolidated fiscal year under review: JPY 32,502 million in sales (an increase of 13.6% compared to the previous fiscal period), JPY 371 million in operating profit (compared to JPY 64 million in operating losses in the previous fiscal period), JPY 177 million in ordinary profits (compared to JPY 233 million in ordinary losses in the previous fiscal period), JPY 1,608 million in gains on the sale of investment securities, and a reduction of JPY 1,626 million due to deferred corporate taxes. As a result of these figures, net profits for the current fiscal term attributable to the parent company's shareholders total JPY 1,893 million (compared to JPY 2,483 million in net losses attributable to the parent company's shareholders in the previous fiscal period). This represents the Group's first return to positive consolidated operating profit in 13 fiscal periods.
Status of businesses for the current fiscal term (the period ending March 31, 2026)
From FY 2026 onward, the Daidoh Limited Group begins the new three-year period that corresponds to our second medium-term management plan. We will strive to enhance corporate value while continuing to engage in initiatives aimed at addressing remaining challenges across our businesses.
Firstly, Japan Blue became a consolidated subsidiary of the Daidoh Limited Group in August 2025, and activity from this subsidiary has been reflected in the Group’s financial performance beginning from the third quarter of FY 2025. Because Japan Blue’s earnings will be consolidated into the Group’s performance for the entirety of FY 2026 from the beginning, we are looking forward to even greater contributions from this subsidiary. In addition, as part of our vision for growth across global markets that was announced in April 2026, we plan to achieve rapid growth by establishing store locations in key cities throughout Japan and strengthening our global marketing.
Brooks Brothers has benefited from broader brand recognition as a result of active investments in advertising, such as through social media initiatives and the use of brand ambassadors, and we are engaged in accelerating the opening of new store locations and developing new business categories aimed at medium- to long-term growth.
For Pontetorto, our textile manufacturing subsidiary in Italy, our goal is to return to a growth trajectory through stronger marketing across the entire company, and the sports division is moving ahead in the planning and development of high-performance textile materials for military and workwear applications. We aim to improve the profitability of the fashion division by continuing to implement a dramatic restructuring of costs.
For New Yorker, we moved forward with cost-saving initiatives throughout FY 2025, such as the closing of unprofitable store locations and a more optimized allocation of personnel, efforts that lead us to expect improved business performance. In addition, in March 2026 we launched the new label Park Slope New Yorker focusing on outlet stores and e-commerce in an effort to attract customers in their 30s and 40s.
With respect to Dynacity, we are expecting the opening in April 2026 of Cainz Odawara on an adjoining lot to create a positive ripple effect and increase customer traffic, and we are forecasting that the shopping center division will continue to maintain stable earnings.
On the other hand, as a result of our efforts beginning in September 2025 to sell our non-core real estate, we are forecasting that adjusted EBITA is expected to decline compared with the previous fiscal year in the corporate real estate division and others.
