Descente (8114) Q1 2025 earnings summary

Executive summary

• Net sales rose to ¥27,482 million, up 1.2% year-over-year, driven by growth of the "DESCENTE" brand, yen depreciation, and strong sales in South Korea.

• Gross profit increased by ¥598 million (3.6%), with margin up 1.5pt to 62.3% due to higher DTC sales and discount restraint.

• Operating income declined 65.0% year-over-year to ¥683 million due to higher SG&A expenses from upfront investments, promotions, and store remodeling.

• Ordinary income and net income both decreased, with net income down 14.2% year-over-year to ¥2,739 million.

• Comprehensive income increased 57.2% year-over-year to ¥4,936 million, mainly due to foreign currency translation adjustments.

Financial highlights

• Net sales: ¥27,482 million (up ¥320 million/1.2% year-over-year).

• Gross profit: ¥17,110 million (up ¥598 million/3.6% year-over-year).

• Operating income: ¥683 million (down ¥1,268 million/65.0% year-over-year).

• Ordinary income: ¥3,455 million (down ¥1,035 million/23.0% year-over-year).

• Net income: ¥2,739 million (down ¥452 million/14.2% year-over-year).

Outlook and guidance

• Full-year forecast: net sales ¥130,000 million, operating income ¥9,000 million, ordinary income ¥17,000 million, net income ¥12,500 million, EPS ¥165.50.

• No year-end dividend planned for FY2025 if the ITOCHU tender offer is successful.