Good morning. My name is Yasumoto from ONWARD HOLDINGS. Thank you very much for taking time despite your busy schedules. Before I begin my presentation on our financial results, I would like to make a brief statement. Due to the deeply tragic accident caused by the Kumamoto earthquake, which occurred on July 28th, midway through the second quarter, our group lost the precious lives of three of our colleagues. Although this was an accident we could never have anticipated, our profound grief will never fade. I would like to once again offer my heartfelt condolence to our three colleagues. Now, I will begin my explanation of the financial results for the second quarter and the first half of the fiscal year. Let me take you through the results presentation material.
First, I will explain the highlights of our consolidated financial results for the second quarter and the first half of fiscal year 2026. As shown in the PowerPoint, for the second quarter, net sales totaled JPY 54.1 billion, a 3% increase year-on-year. Operating profit was JPY 0.5 billion, a 28.5% increase year-on-year. Net profit was JPY 0.6 billion, a 5.6% increase year-on-year, and EBITDA was JPY 1.9 billion, an 11.5% increase year-on-year. We also experienced unfavorable weather conditions during the second quarter. As you are aware, the entire industry faced significant challenges, particularly in June. The second quarter was marked by a series of natural disasters and other events. Overall, the business environment was extremely challenging, particularly in Japan. Turning to overseas markets, the situation in Iran became extremely tense just before the start of fiscal year 2026, and this tension continues to this day.
The Ukraine war and the tension in the Middle East is an issue that has protracted for some time. Political instability in Europe and the Middle East continues to weigh on our business. Despite the challenging business environment, we made various sales efforts during the second quarter and, as I mentioned earlier, secured a 3% increase in sales. Furthermore, regarding operating profit, while we historically experienced a very long period of losses in the second quarter, we have managed to return to profitability recently, and in the second quarter of this fiscal year, we were able to achieve modest increase in operating profit. There are several factors behind this, but as we have consistently stated, we believe the most significant factor is that our decision to clearly identify strategic focus brands and concentrating our management resources to such brands has paid off.
In particular, the KASHIYAMA brand, which focuses on made-to-order suits, achieved a 42.5% increase in sales in the second quarter. This is due not only to the efforts by our sales division, but also to the fact that our manufacturing operations in Asia have become highly profitable. As a result, the brand is increasingly playing a leading role in driving our group's performance from both production and sales. We have very high expectations for UNFILO as a new strategic brand focused primarily on casual wear that emphasizes functional beauty. However, in the second quarter, the weather was cooler than last year. It was not as hot as last year. It was a bit chilly and relatively low temperature, making it difficult for UNFILO to fully leverage its strengths. As a result, growth in the second quarter slowed slightly compared to the first quarter.
J. PRESS saw a 15.2% increase in sales, not only in Japan, but also in the U.S., the brand's home market. The business is currently experiencing rapid growth. I will explain this in more detail later, but with the U.S. leading the way, we believe this brand, which has a very long history as a strategic brand and is our oldest, celebrating its 125th anniversary next year, holds promise for future growth. Finally, in the Wellness segment, Chacott COSMETICS continued to post a 23.9% increase in sales. As this brand traditionally performs well in summer, a season where it has a strong presence, it was able to capitalize on its strength. As a result, for the first half of the fiscal year, net sales increased by 4.3% to JPY 117.5 billion. Operating profit rose by 7% to JPY 6.1 billion.
Net profit increased by 16.6% to JPY 5.6 billion, and EBITDA grew by 6.6% to JPY 9.0 billion. We were thus able to achieve growth in all profit metrics, including sales and profit in the first half. Gross profit margin, however, decreased by 1 percentage point to 54.5%. This was due in part to rising raw material costs and other factors, as well as our efforts to optimize inventory levels, which had remained relatively high since the onset of COVID-19 pandemic. Consequently, the gross profit margin declined slightly during the first half. On the other hand, we were able to reduce the SG&A ratio by 1.2%. As a result, we were able to increase the operating profit margin. We believe this was achieved by thoroughly implementing cost efficiencies, particularly by enhancing the operational capabilities of our multi-brand stores and improving the effectiveness of our advertising and sales promotion activities.
Operating profit totaled JPY 6.1 billion, representing a 7% increase. However, we fell short of the initially announced target by JPY 300 million. The primary factor behind this, which I will explain in detail later, is our European business. The JOSEPH brand, based in London, typically operates on a model where it posts a loss in the first half of the fiscal year and recovers in the second half. However, the loss in the first half widened, causing profits to fall JPY 400 million short of the announced figure. We believe this is the primary reason for falling short of our operating profit target, and it remains one of the major challenges we face for the second half of the fiscal year and beyond. That concludes the highlights for the second quarter. Next, I would like to move on to the highlights of our full-year forecast.
As I just mentioned, since our first half results are generally progressing as planned, our full-year earnings forecast will remain unchanged. On the other hand, several challenges have become apparent, particularly in our European operations. While steadily addressing these issues, we will do our best to report results that exceed our targets for the second half of the fiscal year. Fortunately, in September and the first week of October, temperatures have dropped, and the weather has improved in our favor. Product sales are picking up significantly. While this is a trend across the entire industry, we are already sensing positive momentum at the start of the second half and believe we can fully leverage our group's strengths going forward. As you can see in the presentation material, we aim to firmly achieve the targets we initially announced this spring and ensure both sales and profit growth.
Furthermore, as our group will celebrate its 100th anniversary next year, we intend to make solid progress on preparations for the next century. Next topic is our dividend policy. As mentioned, as we approach our 100th anniversary next year, we wish to express our gratitude to our shareholders for their longstanding support. Therefore, for the year-end dividend for the fiscal year ending February 2027, which will be paid following the shareholders' meeting next May, we had originally planned a regular dividend of JPY 17 at the start of the fiscal year. However, in addition to this, we intend to pay a JPY 3 dividend as a 100th anniversary commemorative dividend. As a result, the year-end dividend next spring in May of next year will total JPY 20. Combined with the interim dividend of JPY 16 scheduled for next month, we plan to pay a total dividend of JPY 36 for the full fiscal year 2026.
Since the dividend for the previous fiscal year was JPY 30, this will mean a 20% increase in dividend. That concludes my explanation of the highlights and our dividend policy.
My name is Yoshida, Director in charge of Finance, Accounting, and Investor Relations. I'd like to start by explaining the results by major business companies for the first half of fiscal year 2026. Please turn to page nine. Let me start with the Domestic Fashion segment. ONWARD KASHIYAMA , ON HOLDINGS saw a slight decline in sales, primarily due to factors such as the closure of department stores. However, improvements in the efficiency of the SG&A ratio led to an increase in profit of JPY 500 million, or 20%. Next is WEGO's domestic business. Here, sales increased by 4% due to aggressive store expansion.
However, because expenses such as initial store opening costs were incurred upfront, operating profit declined slightly in the first half. Nevertheless, we plan to achieve a solid increase in operating profit for the full fiscal year. The made-to-order business, ONWARD PERSONAL STYLE, has maintained its focus on strengthening digital marketing and accelerating store openings, and has achieved a 42.5% increase in sales and an approximately 11-fold increase in operating profit. As a result, the Domestic Fashion segment as a whole posted a 1.9% increase in sales and a 21.6% increase in profit. Next, let me explain the overseas operations. As mentioned earlier in Europe, while sales remained flat, partly due to exchange rate fluctuations, this resulted in a JPY 360 million decrease in profit despite flat sales. This was primarily due to the impact of JOSEPH.
Although sales through e-commerce and other channels grew, deterioration of the situation in Iran and the Middle East had significant impact, leading to a rise in costs, including discounts. The U.S. business will be covered in detail later in the topics section, but both J. PRESS' brick-and-mortar stores and e-commerce performed very well, resulting in a 90% increase in sales and has turned to surplus. In Asia, the Dalian plant, ONWARD PERSONAL STYLE's main manufacturing facility, has continued to post increases in both sales and profit, as efficiency has improved alongside growing suit sales. As a result of the above, the overseas fashion segment saw a 12.5% increase in sales, but a JPY 300 million decrease in profit. For the fashion segment as a whole, we achieved a 3.2% increase in sales and a 13% increase in profit. Next is the Wellness segment.
In the first half, Chacott saw increased sales and profit for both its ballet and yoga lines, as well as Chacott BALANCE, its fitness apparel line. However, the cosmetics business had a particularly significant impact, driving a 10.9% increase in sales. While operating profit rose by only about 2%, partially due to the upfront investments in advertising and promotional expenses for cosmetics, we anticipate that we will be able to gain back the benefits of these investments starting in the second half of the year. CREATIVE YOKO saw a 4.3% increase in sales and a 12.7% increase in operating profit, largely driven by the recovery in inbound tourism. With the start of Sirotan television broadcasts, we will strengthen our efforts to generate licensing sales and merchandise sales going forward. YAMATO experienced a profit decline of approximately JPY 400 million in the first quarter.
However, we were able to recover to a year-on-year profit decline of approximately JPY 200 million for the first half of the fiscal year by regaining a certain level of business from new large-scale projects during the first quarter. Cosmé de Beauté, a company newly consolidated that handles self-nail care products, posted sales of JPY 900 million and operating profit of JPY 250 million, and we are making steady progress with its own PMI. Based on these results, the Wellness segment saw a 12.3% increase in sales and a 3.6% increase in profit. Finally, the Corporate Design segment, particularly the Insight business, which handles promotional items and giveaways. We made progress in securing major corporate accounts, resulting in a 5.4% increase in sales and a 5.1% increase in operating profit.
When we look at the first half as a whole, we believe that these results were achieved due to our success in focusing our investment in strategic focus brands. On the next page, I will explain the net sales by distribution channel. Starting from the top is department stores, which fall under physical stores. As I mentioned earlier, due to factors such as the closure of department stores or their transition to shopping centers, sales decreased by 2.9% at JPY 700 million, and its overall share of total sales fell by 1.7 percentage points. On the other hand, sales from other channels, including directly operating stores and others, increased by 8.2%, a JPY 3.8 billion increase, and its shares of total sales rose by 1.8 percentage points. As a result, sales from the physical stores channel increased by 4.3% at JPY 3.1 billion, while the share of total sales remained flat.
Total sales of e-commerce increased by 4.1% and increased by JPY 1.1 billion, resulting in an e-commerce share of 27.6% and a share of our own e-commerce platform at 78.9%. Finally, please turn to page 13. This slide shows our full-year performance forecast by major business companies. As mentioned earlier, we have not revised the overall full-year forecast after taking into account the progress of our first half results. Therefore, I will omit explanations for individual companies. However, to reiterate, we forecast a 2.2% increase in sales and a 12.3% increase in profit for the total Domestic Fashion segment. For the Overseas Fashion segment, we plan for a 17.4% increase in sales and a 39% increase in profit. The total Fashion segment is planned for a 4.1% increase in sales and a 13.6% increase in profit.
Meanwhile, the total Wellness segment is planned for an 8.8% increase in sales and an 8.4% increase in profit. The B2B Corporate Design segment is planned to grow 1.3% in sales and 9.8% in profit. When we total all of what I mentioned, we plan to achieve a 4.3% increase in consolidated sales and a double-digit increase in profit of 10.3%. Given the situation in Middle East regarding JOSEPH, I anticipate some minor fluctuations between companies, but I do not believe that there will be any cross-segment impact on the overall total, and I am confident we can fully achieve these targets. That concludes my presentation. Thank you very much.
Next, I'd like to discuss three key topics. The first topic is the current status of our KASHIYAMA business, one of our strategic brands that we are focusing on strengthening.
As I mentioned earlier, sales increased significantly by 42.5% year-on-year in the first half. The business had already returned to profitability during the first half, and profit increased more than tenfold. It has now moved beyond its break-even point, which means that further sales growth should translate directly into higher profits. That is particularly important given that the business operates factories requiring substantial fixed cost investment. We have high expectations for KASHIYAMA as a strategic brand that will drive profit growth for the group going forward. First, we intend to further diversify our sales channels. The business originally started with KASHIYAMA the Smart Tailor, a brand built around the concept of providing high quality made-to-order suits at very competitive prices with a short delivery time.
Until now, our main channels have been directly operated flagship stores in central urban areas to raise brand awareness, as well as stores in the shopping centers in suburban and regional locations. However, starting this fiscal year, our made-to-order suit business, which ONWARD KASHIYAMA had operated for many years through department stores and which we referred to internally as our easy order business, has been transferred to ONWARD PERSONAL STYLE. Now we have a new brand, KASHIYAMA PREMIUM. Since this spring, with a new production system in place, we have been operating this brand. The average spending per customer is approximately 3x that of Smart Tailor. We plan to expand our customer base to include segments such as executives that Smart Tailor alone cannot fully serve. Our aim is to offer products to a broad range of customers, from senior executives to students preparing for job interviews.
In addition, since this summer, we have been testing a new sales channel at outlet malls. These stores are not intended to serve as outlets for clearing excess inventory. Instead, products are sold at their regular prices, leveraging the strong customer traffic that outlet malls attract. The initial trial at an outlet mall in Sano, Tochigi Prefecture, has been performing extremely well. We plan to roll out this model to outlet facilities across Japan. We have also offered online sales from the outset, and we expect further growth in repeat purchases, particularly as customers place additional orders for their second and subsequent made-to-order suits online. In this way, we aim to expand customer touchpoints across all sales channels, standalone stores, shopping centers, department stores, outlet malls, and online channel.
The strong results in the first half have given us considerable confidence that this strategy is working, contributing to the substantial increase in both sales and profit. Turning to our product offering, sales have traditionally been heavily concentrated in made-to-order suits. We have therefore been strengthening our production capacity for made-to-order dress shirts, and since the beginning of this fiscal year, sales of these shirts have doubled year-on-year. Previously, delivery times for dress shirts were 2x to 3 x longer than those for suits, making it difficult for customers to purchase both at the same time. From this fiscal year, we have finally established a system that allows shirts and suits to be shipped together within the same delivery timeframe.
Naturally, purchasing a suit and dress shirt together increases the average transaction value while also improving customer satisfaction. We also plan to expand our range of ready-to-wear products, including cut-and-sew tops, shirts, blouses, and trousers. Rather than insisting that every item be made to order, we will listen to customer feedback and introduce a carefully selected range of ready-to-wear apparel that complements our suits and aligns with the KASHIYAMA brand concept. To support this broader product lineup, we will also be expanding the size of our stores. We intend to extend our offering to products such as coats and knitwear, allowing us to capture business wear demand that cannot be fully met by made-to-order products alone.
By expanding customer touchpoints, increasing the number of stores, and raising average sales per store and average spending per customer, we aim to accelerate the growth of the KASHIYAMA business in the second half and beyond. That concludes the first topic. The second topic is our overseas business, specifically J. PRESS. J. PRESS will celebrate its 125th anniversary next year. Founded in 1902, it is a traditional American-style apparel brand with a long and distinguished history. Last year, we welcomed Jack Carlson as CEO and Creative Director to reinvigorate the brand. His digital marketing expertise has already begun to deliver tangible results. Even though he has been with us for only about a year and a half, in the first half, sales of J. PRESS in the U.S. increased approximately 1.9 x year-on-year, representing nearly a doubling of sales.
At the same time, we have streamlined the product range, concentrating on our strongest core items, classic J. PRESS blazers, button-down shirts, trousers, and other timeless basics. These products are attracting a substantial number of customers, particularly through online channels and improving business efficiency. We believe that J. PRESS is returning to its roots in a very positive way. The business also returned to profitability in the first half, something that had not happened in the U.S. for many years. We see J. PRESS as a strategic brand with significant potential to lead the group's overseas business going forward. After entering into the second half, we held a runway show in early September to coincide with New York Fashion Week. on September 18th, we also reopened our New York flagship store on Madison Avenue. The store had previously been located on the first floor of the Yale Club.
The move to Madison Avenue brings the brand back to a street where J. PRESS originally had a store, making this another example of a return to our roots. Although the new store has opened for only about half a month, sales from September 18th through October 4th were 65% higher than sales at the former Yale Club location over the comparable period. Sales also exceeded our initial plan by 30%, giving the store a very strong start. As shown in the materials, the new store is becoming a landmark that attracts not only existing customers but also new ones. We, therefore, have high expectations for its future performance. Using the New York Store as a model, we plan to relocate and reopen our Washington, D.C. store before the end of this year.
Our flagship store in New Haven, near Yale University, where the brand was founded, was already renovated and reopened four years ago. With the Washington, D.C. project, we will have completed the renewal of all three of our key stores by the end of this year. From next year onward, we are initially considering opening approximately 10 additional stores across the United States Potential locations include Los Angeles, San Francisco, Chicago, Boston, Texas, and a second location in Manhattan. Our intention is not to simply increase the number of stores indiscriminately. Rather, we want to open stores in highly visible locations that will maximize synergies with our online store. Naturally, the availability of suitable properties will determine the timing. We will proceed in no particular order as appropriate locations that fit J. PRESS brand become available.
For now, our priority is to establish an effective new model for operating physical stores at our existing three locations, while also developing the techniques and capabilities needed to maximize synergies with our online store in a way that is true to the J. PRESS brand. That concludes the second topic. The third topic is our intellectual property or IP business. CREATIVE YOKO, which has long operated business in pet products and heartwarming lifestyle goods, owns the Sirotan character, a harp seal character created in 1999. The character has been developed over the past 27 years and already has a large and devoted fan base throughout Japan known as Sirotanists. We now want to raise its profile and broaden public awareness, and we have launched a collaboration with TV Asahi to achieve this. The collaboration began with a one-minute short animated program broadcast at 4:29 P.M. on Saturday, October 3rd.
The second episode will air tomorrow, and the response so far has exceeded our expectations. The videos are also available on platforms such as YouTube. Although less than a week had passed since the first episode was released, the videos had already viewed approximately 240,000 times. We cannot directly compare these figures with those of other anime productions, but people involved in the anime business have told us that reaching this level of viewership in less than a week represents a very strong initial response. This is why we describe the response as exceeding our expectations. As we continue to raise awareness of the character, we intend to expand sales, focusing primarily on CREATIVE YOKO's brand stores, where product development and retailing are among our core strengths.
We will broaden our product lineup through collaborations with the anime production committee, while also strengthening promotional activities that go beyond what the ONWARD Group could achieve on its own. Licensing will be another key pillar of the IP business. Through TV Asahi's various networks, we have been receiving inquiries and establishing arrangements with master licenses in individual countries for global expansion. Our goal is for Sirotan to build brand awareness worldwide, not just in Japan, and ultimately to generate sales of merchandise and other related products. Working together with the anime production committee, we intend to expand the licensing business. In addition to our directly operated business in Japan, we want overseas licensing to become a major pillar of our IP business. We have already received inquiries from a variety of potential partners. Sales in the first half increased by 10% year-on-year.
The impact of the anime collaboration has not yet been reflected in these results, but we expect growth to accelerate from here. In Japan, we plan to expand our network of Sirotan merchandise sales locations, beginning with LUCUA osaka, and subsequently rolling out the concept to other locations. We are receiving considerable interest in the character, and we are excited about the opportunities ahead. To summarize, I have discussed three businesses that we expect could drive the group's growth in the second half and beyond. Our Domestic Fashion and Apparel business, our overseas business, and our anime character business within the Wellness segment. Thank you.