To all of our shareholders, I would like to extend my deepest gratitude for your continued and exceptional level of support.
Throughout the fiscal year ending in March 2024, we observed stronger individual consumer spending alongside the normalization of the economy, as well as an expansion in inbound consumption. Within this environment, we have worked to increase efficiency in our various businesses and, as a result, have achieved lower losses when compared to the previous fiscal period.
Based on our management principles of "Customer First" and "Quality Oriented," we formulated a three-year, medium-term management plan around the theme of "Innovation and Evolution" and engaged in initiatives to evolve the corporate group into an entity capable of generating profits from a medium- to long-term management perspective.
Although the future of the business environment in which we operate remains unclear, the board of directors, which was reformed at the general shareholders' meeting held on June 27, 2024, will drive the efforts of the Group as we work together to further improve our performance and increase shareholder value.
To all of our shareholders, I humbly ask for your ongoing understanding and support in the future.
Status of operations for the fiscal year under review (the period ending March 31, 2024)
Throughout the fiscal year under review (April 1, 2023, through March 31, 2024), the normalization of economic activity in Japan following the impact of COVID-19 infections firmly took shape with the continuation of a gradual, fundamental recovery. On the other hand, international instability led to sharp rises in the cost of resources and to increased procurement costs due to exchange fluctuations related to the depreciation of the yen. The price of goods in Japan continued to rise, affecting consumer sentiment, and the outlook for the future business environment remains unclear.
In the apparel industry, we have seen a recovery in demand due to factors such as demand from inbound consumption, which was driven by greater volumes of travelers accompanying the normalization of economic activity and the weakening of the yen. On the other hand, we are facing stricter competition in fall and winter clothing as a shift to higher-than-average temperatures has delayed the uptake of heavier seasonal clothing.
Our apparel business has experienced increased sales alongside a recovery in demand for our retail divisions, while measures such as closing unprofitable store locations and refraining from discounted sales have resulted in improved profitability and reduced losses. In January 2024, we celebrated the 60th anniversary of the establishment of NEWYORKER, our flagship retail brand. We are also engaging in initiatives related to the brand intended to strengthen the relationship with our customers, which include formulating plans for related goods and establishing a dedicated website. Our licensed brand Brooks Brothers continues to experience continuous growth as it benefits from healthy inbound demand. In addition, our subsidiary in China is undergoing a number of structural improvements to its business, including withdrawing from some business areas and implementing changes to other business activities.
In our real estate and leasing business, we observed increased sales due to factors such as recovery in customer traffic at our commercial facilities, while profits did experience a temporary dip during the fiscal year under review due to a recomposition of held assets that was carried out at the end of the first half of the fiscal year.
As a result of the above, the Group posted the following financial results for the consolidated fiscal year under review: JPY 28,697 million in sales (an increase of 1.7% compared to the previous fiscal period), JPY 336 million in ordinary losses (compared to JPY 378 million in ordinary losses in the previous fiscal period), and expenses of JPY 935 million related to adjustments such as for corporate tax. As a result of these figures, net profits for the fiscal period under review attributable to the parent company’s shareholders total JPY 291 million (compared to JPY 6,757 million of net profits attributable to the parent company’s shareholders in the previous period).
Medium- to Long-term Activities
In order for us to build a robust profit structure and provide appropriate returns to our shareholders, we announced on May 20, 2024, the creation of a three-year, medium-term management plan based on the theme of "Innovation and Evolution," which covers the period through the fiscal year ending in March 2027. The goals of this medium-term management plan include achieving a consolidated operating profit of JPY 1.5 billion for the fiscal year ending in March 2027 and an ROE of 8%.
As part of this medium-term management plan, from the standpoint of implementing reforms to our portfolio of businesses, we will clearly identify businesses that we will work to grow and businesses in which we will reduce our involvement, based on an examination of the growth potential and profit ratios of the various businesses of the Daidoh Limited Group and the external environment. Taking these steps represents our commitment to engaging in businesses with high profitability and growth potential.
As for the apparel business, in order to effect the further growth of Brooks Brothers, a retail division that is enjoying increased sales, we plan to promote well-received collaboration projects and other measures including expanded lineups of value-added goods and the promotion of investment in e-commerce. With respect to NEWYORKER, which conversely is experiencing falling rates of sales growth, we plan to improve profit ratios by implementing supply chain reforms, such as introducing a system for improving order accuracy and promoting measures for directly administering production operations outside Japan and making distribution operations more efficient.
As for our manufacturing division, at PONTETORTO, which is based in Italy and manufactures materials for use in fashion wear and sportswear, we are focusing our efforts on growth, engaging in initiatives for increasing sales of the recyclable and biodegradable materials developed by the company that have been favorably received.
With respect to our real estate and leasing business, the Dynacity commercial complex in Odawara continues to demonstrate a stable, high profit ratio and is fulfilling its role as a commercial facility integrated into the local community. As for our real estate for lease other than Dynacity, we are currently considering the requirements for capital for the Group as a whole in a flexible manner.
In addition to the initiatives outlined above, we are making efforts to improve corporate transparency through better provision of IR information, with a focus on disclosure as we progress through our medium-term management plan.