and ST HD (2685) Earnings model update

Research evidence excerpt

and ST HD (2685) Earnings model update

J P M O R G A N Asia Pacific Equity Research

15 June 2026

and ST HD (2685) Neutral

2685.T, 2685 JP

Earnings model update Price (12 Jun 26):¥3,440

▲Price Target (Dec-26):¥3,200

Prior (Dec-26):¥2,900

We raise our earnings forecasts, increasing our end-2026 price target from ¥2,900

to ¥3,200, and leaving our Neutral rating unchanged. This fiscal year, the company Japan Equity Research

plans to reduce the discounted sales ratio, mainly for the Global Work brand, but Retail

we do not think it will be possible to significantly improve the gross margin due AC Dairo Murata

to the expansion of the entry-price product lineup and the depreciation of the yen. (81-3) 6736 8620

However, the company says it is expanding Global Work product lineup to dairo.murata@jpmorgan.com

incorporate fashion trends, and this has boosted full-price sales of spring items, so Ami Terai

it will be interesting to see how things develop here. (81-3) 6736-8660

ami.terai@jpmorgan.com

• Upward revision of earnings forecasts: We raise our earnings forecasts in Kazuha Matsuo

light of 2H FY2025 results, 1Q sales, and the overall operating environment, (81-3) 6736-8614

increasing our operating profit forecasts for this fiscal year onward by 6–7%. kazuha.matsuo@jpmorgan.com

Our operating profit forecasts for the current and next fiscal years are on par JPMorgan Securities Japan Co., Ltd.

with the Bloomberg market consensus. In addition to raising the sales outlook

based on current same-store trends, we lower our expense outlook in light of

Key Changes (FYE Feb)

cost control in the previous fiscal year and a decline in amortization

Prev Cur Δ

accompanying a goodwill write-down at the 4Q earnings report. However, Adj. EPS - 27E (¥) 228.97 244.97 7.0%