Message from the President

During the current consolidated fiscal year, the Japanese economy faced sluggish export growth due to rising geopolitical risks such as the deterioration of Japan-China relations and rising prices driven by soaring resource prices and the weak yen. Although real wages showed signs of improvement, consumers continued to adopt a thrifty mindset and keep their spending per purchase in check. Furthermore, the business environment surrounding our company remains uncertain, with risks of fluctuations in raw material prices increasing further due to the prolonged tensions in the Middle East and Ukraine.

In light of this business environment, as part of our medium-term management plan “VISION 2030 Stage 2,” which began this fiscal year, our Group has designated this period as the “Three Years of Transformation” with the goal of “building a sustainable business foundation and becoming a company that continues to be the global choice.” We have initiated efforts to strengthen and expand our Functional Solutions and Medical businesses, as well as to implement structural reforms in our Apparel and Life Create businesses.

Net sales decreased by 6,199 million yen due to the impact of the discontinuation of the electronic components business at the end of the previous fiscal year, a decline in overseas sales of plastic film, and a decrease in sales through existing channels such as apparel mass-market retailers.

Operating profit decreased by 3,038 million yen due to the impact of a write-down of inventory assets aimed at optimizing inventory levels in the apparel business—which is currently undergoing structural reforms—as well as stagnant sales in China and increased fixed costs in the medical business. Ordinary income decreased by 3,260 million yen. In addition, profit attributable to owners of the parent decreased by 5,769 million yen, primarily due to the impact of business restructuring expenses in the apparel business recorded in the first quarter.

Although we continue to face challenging circumstances, we will continue to provide our customers with the unique “Comfort” that only Gunze can offer and strive to achieve sustainable management. We kindly request the continued support and encouragement of our shareholders.

June 2026

President
GUNZE LIMITED