TSI Holdings: Profits up despite Q1 sales dip, full-year outlook revised

TSI Holdings announced its first-half results for fiscal year 2026 (March 1 to August 31, 2025), reporting net sales of JPY 66.16 bn, down JPY 9.06 bn or 12.0% year-on-year. This decline was attributed to business exits in the previous fiscal year, delays in member migration to a new management system, and challenges in new customer acquisition for core brands. Despite reduced sales, operating income increased to JPY 0.64 bn, up JPY 0.86 bn, reflecting improvements in gross profit margin and selling, general, and administrative (SG&A) expenses due to structural reforms.

Structural reforms delivered approximately JPY 3.2 bn in operating profit gains, with improvements across various areas including purchase cost reductions, retail operation reform, e-commerce platform integration, and SG&A efficiency. For the full fiscal year ending February 2026, TSI Holdings revised its consolidated net sales forecast to JPY 169.0 bn, an increase of JPY 16.0 bn from the initial forecast, primarily due to the consolidation of Daytona International Co., Ltd. Operating income and other profit forecasts remain unchanged.

Domestic retail sales declined, with department store sales at 81.4% and e-commerce sales at 83.2% of the previous year's level. Overseas sales were 65.1%, impacted by U.S. business divestment and restructuring. However, certain brands like AVIREX saw strong performance with 112.0% year-on-year growth. TSI Holdings plans to launch new growth initiatives in the second half, including pop-up events and new brands, while strengthening existing businesses and shareholder returns.