Global Style (7126) FY2026 Earnings Deep Dive: Record-High Profits, Accelerated Store Openings, and Future Growth Scenarios Driven by SNS Strategy

1. Earnings Overview and Key Performance Highlights

Global Style Co., Ltd., operator of the custom suit specialty store "GINZA Global Style," delivered a robust performance for the fiscal year ended July 2026. The company achieved year-over-year growth in both revenue and all profit tiers, reaching record-high profit levels .

Driven by solid performance in existing stores and the revenue contribution from new store openings, the company achieved significant growth in both its top and bottom lines.

FY2026 Earnings Summary (YoY)

• Net Sales : 12.383 billion JPY ( +8.1% YoY, +923 million JPY)
• Gross Profit : 6.824 billion JPY ( +6.7% YoY, +430 million JPY)
• Operating Profit : 939 million JPY ( +17.2% YoY, +138 million JPY)
• Ordinary Profit : 958 million JPY ( +16.6% YoY, +136 million JPY)
• Net Income : 651 million JPY ( +29.5% YoY, +148 million JPY)

Analysis of Profit Growth Factors

Despite upfront investments in personnel costs, rent, and promotional activities associated with new store openings and new marketing initiatives, the steady growth in existing store sales successfully absorbed these costs. Furthermore, the company benefited from a reduction in expenses (123 million JPY) due to the revision of the useful life of fixed assets at its stores. This contributed to an improvement in the operating profit margin to approximately 7.58%, with net income achieving a significant 29.5% year-over-year increase.

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2. Order Trend Analysis: Order Volume as a Leading Indicator

In the company's business model, there is a time lag between the order of a custom suit and its delivery/revenue recognition. Therefore, "monthly order volume" is positioned as the most critical leading indicator for forecasting performance in the following periods.

Key Points on Order Volume

• Total Store Order Volume : 12.401 billion JPY (+9.5% YoY)
• Existing Store Order Volume : +6.6% YoY

Monthly trends show a consistent pattern of exceeding the previous year's figures throughout the year. High order levels were recorded during the peak autumn/winter season (October: 1.244 billion JPY; November: 1.414 billion JPY) and the spring demand period (January: 1.165 billion JPY to March: 1.216 billion JPY). The fact that existing store orders grew by 6.6%, alongside the contribution from two new stores, demonstrates that the company's brand power and customer acquisition strategies continue to yield results.

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3. Financial Position and Balance Sheet Health

As of the end of the fiscal year ended July 2026, the company's financial position reflected both business expansion and profit accumulation, characterized by an increase in assets and a reduction in liabilities.

Assets

• Total Assets : 7.828 billion JPY (+369 million JPY from previous year-end)
• Current Assets : 3.966 billion JPY (+218 million JPY)
  • Cash and Deposits: 739 million JPY (+69 million JPY)
  • Raw Materials and Supplies: 2.441 billion JPY (+72 million JPY)
• Non-Current Assets : 3.861 billion JPY (+150 million JPY)

Liabilities and Net Assets

• Total Liabilities : 4.338 billion JPY (-208 million JPY)
  • Current Liabilities: 3.587 billion JPY (+45 million JPY)
  • Non-Current Liabilities: 751 million JPY (-254 million JPY, including a 174 million JPY reduction in long-term borrowings)
• Total Net Assets : 3.489 billion JPY (+578 million JPY)
• Equity Ratio : Approximately 44.6% (up significantly from approximately 39.0% at the previous year-end)

Financial health has further improved due to the accumulation of retained earnings, which strengthened net assets, and the repayment of long-term debt.

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4. Growth Strategy for FY2027

Under the theme "ENJOY ORDER!", the company is pursuing the following three priority strategies to further expand its business scale and market share:

1. Aggressive New Store Openings (Strengthening Dominant Strategy)
   • Accelerating openings in urban suburban areas in addition to major city centers.
   • Expanding customer touchpoints to capture demand for custom suits and increase market share.
2. Advancement of SNS Marketing
   • Original SNS drama-style content, such as "Gachi-Suit" and "Ichigun Jacket," has surpassed 70 million total views .
   • Strongly driving awareness among younger demographics and new customers who were previously unfamiliar with custom suits.
3. Enhancement of Brand Value and New Product Development
   • Maximizing customer satisfaction by balancing overwhelming cost-performance with high-quality tailoring (e.g., the new "ZERO Like" line).

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5. FY2027 Earnings Forecast and Shareholder Returns

For the fiscal year ending July 2027, the company expects to maintain revenue and profit growth while accelerating new store openings as growth investments.

FY2027 Consolidated Earnings Forecast

• Net Sales : 13.671 billion JPY (+10.4% YoY)
• Gross Profit : 7.516 billion JPY (+10.1% YoY)
• Operating Profit : 957 million JPY (+1.8% YoY)
• Ordinary Profit : 964 million JPY (+0.6% YoY)
• Net Income : 663 million JPY (+1.7% YoY)

Assumptions and Profit Structure

The sales forecast incorporates the revenue contribution from 6 new store openings , aiming to surpass the 13 billion JPY mark for the first time (+10.4% YoY). Regarding profits, the plan anticipates a modest increase (+1.8% in operating profit) due to the absence of the one-time expense reduction from the fixed asset useful life revision (123 million JPY) recorded in the previous year, as well as upfront costs (personnel, rent, capital expenditure) associated with the 6 new stores.

Shareholder Return Policy

• Dividends : Implementing performance-linked dividends while balancing future growth investments and financial strength. The company targets a consolidated dividend payout ratio of approximately 30% , with one year-end dividend payment planned.
• Shareholder Benefit Program : Continuing the distribution of "Shareholder Benefit Coupons" usable at company stores, emphasizing the opportunity for shareholders to experience the joy of custom ordering firsthand.
• IR Transparency : Committed to deepening dialogue with the capital markets through continued earnings briefings, IR reports, and video distribution.

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6. Conclusion

Global Style's fiscal year ended July 2026 was a landmark period, achieving record-high sales and profits supported by strong orders from both existing and new stores, alongside clear improvements in financial health, such as an increased equity ratio.

In the upcoming fiscal year ending July 2027, the company enters an aggressive investment phase with 6 new store openings per year . The plan aims for double-digit revenue growth (+10.4%) while absorbing temporary expansion costs. The key to long-term corporate value enhancement lies in cultivating new customer segments through SNS marketing and expanding customer touchpoints via a dominant store opening strategy.