Edgar Filing: WACOAL CORP

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WACOAL CORP.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of November, 2004

Commission File Number: 000-11743

WACOAL CORP.

(Translation of Registrant’s Name into English)

29, Nakajima-cho, Kisshoin, Minami-ku
Kyoto, Japan
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.


Form 20-F þ		Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes o		No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A

Wacoal Corp.
Form 6-K

TABLE OF CONTENTS

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Interim Consolidated and Non-consolidated Financial Information for the First half of the Fiscal Year Ending March 31, 2005

On November 12, 2004, we released our consolidated and non-consolidated financial information for the six-month period ended September 30, 2004. Attached as Exhibit 1 hereto is an English translation of this financial information.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The attached financial statements, and accompanying information, contain forward-looking statements that are based on our current expectations, assumptions, estimates and projections about our company, our industry and other relevant factors. The forward-looking statements are subject to various risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts. The forward-looking statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition, or state other “forward-looking” information. Forward-looking statements are contained in the sections entitled “2. Forecast of Consolidated Results for the Year Ending March 2005 (April 1, 2004 to March 31, 2005)”, “II. Management Policies”, “III. Business Results and Financial Condition”, “VII. 2. Forecast of Business Results for the Year Ending March 2005 (April 1, 2004 to March 31, 2005)”, and elsewhere in the attached financial statements and accompanying information.

Known and unknown risks, uncertainties and other factors could cause our actual results, performance or achievements to differ materially from those expressed or implied by any forward-looking statement contained in the attached financial statements and accompanying information. Among the factors that you should bear in mind as you consider any forward-looking statement are the following:

	•		The impact of weak consumer spending in Japan and our other markets on our sales and profitability;

	•		The impact on our business of anticipated continued weakness of department stores and other general retailers in Japan;

	•		Our ability to successfully develop, manufacture and market products in Japan and our other markets that meet the changing tastes and needs of consumers;

	•		Our ability to reduce costs by consolidating our activities in Japan, increasing our product sourcing and manufacturing in lower-cost countries such as China and Vietnam, and other efforts to reduce costs;

	•		Our ability to successfully expand our network of our own specialty retail stores and achieve profitable operations at these stores;

	•		Our ability to further develop our catalog and Internet sales capabilities;

	•		The highly competitive nature of our business and the strength of our competitors;

	•		Effects of seasonality on our business and performance;

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	•		Risks related to conducting our business internationally, including political and economic instability, unexpected legal or regulatory changes, trade protection measures and import or export licensing requirements, changes in tax laws, fluctuations in currency exchange rates, difficulties managing widespread operations, differing protection of intellectual property, difficulties in collecting accounts receivable and public health crises such as SARS;

	•		The impact of weakness in the Japanese equity markets and other risks with respect to our holdings of Japanese equity securities;

	•		Unexpected increases in our funding obligations with respect to our employee benefit plans due to adverse conditions in the equity or debt markets or other factors; and

	•		Acquisitions, divestitures, restructurings, product withdrawals or other extraordinary events affecting our business.

The information contained in the section entitled “Item 3—Key Information—Risk Factors” of our Annual Report on Form 20-F for the fiscal year ended March 31, 2004 also identifies factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement contained in the attached financial statements and accompanying information. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the foregoing list or the information provided elsewhere in our annual report to be a complete set of all such factors.

We undertake no obligation to update any forward-looking statements contained in the attached financial statements and accompanying information, whether as a result of new information, future events or otherwise.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	WACOAL CORP. (Registrant)
	By:	/s/ Ikuo Otani
		Ikuo Otani
		Corporate Officer Director of Finance, Corporate Planning

Date: November 12, 2004

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EXHIBIT INDEX


		Page
Exhibit 1	Interim Consolidated and Non-consolidated Financial Information for the First Half of the Fiscal Year Ending March 31, 2005		7

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EXHIBIT 1

Interim Consolidated and Non-consolidated Financial Information for the First Half
of the Fiscal Year Ending March 31, 2005

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Interim Consolidated Financial Statements for the First Half of the Fiscal Year Ending March 31, 2005 [U.S. Accounting Standards]

November 12, 2004


Listed Company: Wacoal Corp. Code Number: 3591 (URL http://www.wacoal.co.jp/)		Stock Exchanges: Tokyo, Osaka Location of Principal Office: Kyoto

Representative:		Position: President and Director Name: Yoshikata Tsukamoto
For Inquiries:		Position: Corporate Officer; Director of Finance, Corporate Planning Name: Ikuo Otani Tel: (075) 682-1010

Date of Meeting of Board of Directors to Approve Interim Financial Statements: November 12, 2004
Application of U.S. Accounting Standards: Yes

Consolidated Results for the Six-Month Period Ended September 30, 2004 (April 1, 2004 to September 30, 2004) — Unaudited

(1)

Consolidated Business Results — Unaudited (Note) Amounts less than 1 million yen have been rounded off.


	Sales					Operating Income					Pre-tax Net Income
	Million Yen		%			Million Yen		%			Million Yen		%
Six-Month Period Ended September 30, 2004		83,242		(1.3	)		11,292		87.5			11,187		67.1
Six-Month Period Ended September 30, 2003		84,347		(3.2	)		6,021		(24.9	)		6,694		(1.6	)
Year Ended March 31, 2004		163,155		(0.3	)		3,016		(58.5	)		4,532		(1.6	)

	Net Income					Net Income Per Share					Diluted Net Earnings Per Share
	Million Yen		%			Yen					Yen
Six-Month Period Ended September 30, 2004		6,495		46.8			45.12					—
Six-Month Period Ended September 30, 2003		4,424		7.9			30.18					—
Year Ended March 31, 2004		2,902		0.1			19.85					—


(Note)	(i)	Equity in income of equity-method investment:
		Six-month period ended September 30, 2004: 463 million yen
		Six-month period ended September 30, 2003: 382 million yen
		The year ended March 31, 2004: 1,032 million yen
	(ii)	Average number of outstanding shares during the period (year) ended (consolidated):
		September 30, 2004: 143,961,474 shares
		September 30, 2003: 146,569,106 shares
		March 31, 2004: 146,226,674 shares
	(iii)	Changes in accounting method: None
	(iv)	Percentages indicated under sales, operating income, pre-tax interim (current year) net income, and interim (current year) net income represent the increase/decrease compared to the previous six-month period.

(2)

Consolidated Financial Condition — Unaudited


			Total Shareholders’		Total Shareholders’		Shareholders’
	Total Assets		Equity		Equity Ratio		Equity Per Share
	Million Yen		Million Yen		%		Yen
Six-Month Period Ended September 30, 2004		221,444		173,661		78.4		1,206.31
Six-Month Period Ended September 30, 2003		227,916		170,347		74.7		1,162.24
Year ended March 31, 2004		224,803		170,758		76.0		1,186.12


(Note)		Number of outstanding shares at end of the period (consolidated):
		September 30, 2004: 143,960,102 shares
		September 30, 2003: 146,567,476 shares
		March 31, 2004: 143,963,825 shares

(3)

Consolidated Cash Flow Status — Unaudited


			Cash Flow provided by
	Cash Flow from		(used in) Investing			Cash Flow used in			Balance of Cash and Cash
	Operating Activities		Activities			Financing Activities			Equivalents at End of Year
	Million Yen		Million Yen			Million Yen			Million Yen
Six-Month Period Ended September 30, 2004		1,317		(1,516	)		(2,676	)		24,599
Six-Month Period Ended September 30, 2003		2,859		8,852			(2,102	)		36,864
Year ended March 31, 2004		5,201		1,328			(6,138	)		27,443

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(4)		Items related to the Consolidation Criteria and Equity Method Application Number of consolidated subsidiaries: 36 companies Number of non-consolidated subsidiaries subject to equity method: None Number of affiliated companies subject to equity method: 9 companies

(5)		Changes in the Consolidation Criteria and Equity Method Application Consolidated: (new) None (exception) 1 company Equity Method: (new) None (exception) None

2.		Forecast of Consolidated Results for the Year Ending March 31, 2005 (April 1, 2004 to March 31, 2005)

Sales

Operating Income

Pre-tax Net Income

Net Income

Million Yen

Annual

164,000

12,500

12,200

7,300

(Reference) Expected net earnings per share (annual basis): 50.71 yen

* The foregoing estimates are made based on information available as of the date this data was released, and actual results may significantly differ from estimates due to various factors arising in the future. Please refer to page 8 of the attachment for information relating to the foregoing estimates.

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I. Status of Corporate Group

Our corporate group consists of Wacoal Corp. (the “Company”), 36 subsidiaries and 9 affiliated companies, and is principally engaged in the manufacture and wholesale distribution of innerwear (mainly women’s foundation wear, lingerie, nightwear and children’s underwear), outerwear, sportswear, and other textile goods and related products, as well as the wholesale and direct sales of certain products to consumers. The corporate group also conducts business in the areas of restaurant, culture, services and interior design.

Segment information and a summary of Wacoal companies is as follows:


Business Segment	Operating Segment	Major Companies
Textile Goods and Related Products	Manufacturing and Sales Companies	Domestic	Wacoal Corp., Studio Five Corp. 1 Other Company
			(Total: 3 Companies)
		Overseas	Wacoal America Inc., Wacoal China Co., Ltd., Shinyoung Wacoal Inc. (South Korea), Taiwan Wacoal Co., Ltd., Thai Wacoal Public Co., Ltd. 3 Other Companies
			(Total: 8 Companies)
	Sales Companies	Domestic	Intimate Garden Corp., Une Nana Cool Corp. 1 Other Company
			(Total: 3 Companies)
		Overseas	Wacoal Singapore Private Ltd., Wacoal Hong Kong Co., Ltd., Wacoal France S.A., Wacoal (UK) Ltd. 3 Other Companies
			(Total: 7 Companies)
	Apparel Manufacturers	Domestic	Kyushu Wacoal Manufacturing Corp., Tokai Wacoal Sewing Corp., Niigata Wacoal Sewing Corp., Torica Inc. 4 Other Companies
			(Total: 8 Companies)
		Overseas	Wacoal Dominicana Corp. (Dominican Republic)*1 Guandong Wacoal Inc. 2 Other Companies
			(Total: 4 Companies)
	Other Textile Related Companies	Domestic	Wacoal Distribution Corp. 1 Other Company
			(Total: 2 Companies)
		Overseas	Wacoal International Hong Kong Co., Ltd.
			(Total: 1 Company)
Others	Cultural Business Service Companies	Domestic	Wacoal Corp., Wacoal Art Center Co., Ltd.
			(Total: 2 Companies)
	Other Business Companies	Domestic	Wacoal Corp., Nanasai Co., Ltd., Wakoh Corp., Wacoal Service Co., Ltd., Kisco Co., Ltd., Wacoal Career Service Corp., House of Rose Co., Ltd.
			(Total: 7 Companies)
		Overseas	Wacoal International Corp. (U.S.) Wacoal Investment Co., Ltd. (Taiwan) 1 Other Company
			(Total: 3 Companies)

*¹

“Saradona Mfg Corp.” changed its name to “Wacoal Dominicana Corp.” in May 2004.

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(CHART)

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II. Management Policies

Basic Business Policy

As a “Female Affinity Company”, our group endeavors to support a beautiful lifestyle for women. By capturing both body and mind, and by working to support each and every woman’s expression of their own inner and outer beauty, we are working actively to develop our “Body Designing Business.” In order to put this theme into action, and to gain the loyalty of our customers, we will provide “Authentic Value” through beauty, comfort and health products and services in our “Intimate Apparel” and “Wellness” businesses. We believe that such business activities will appeal to customers and enhance their loyalty to our “Wacoal” corporate brand. We believe that becoming a continually growing company by gaining customer support through these business activities, will also lead to increasing shareholder value. Under the assumption that the expansion of business operations will increase profits and contribute to employee job satisfaction, we will endeavor to seize markets and create new value.

In the meantime, we recognize that it is essential to engage in CSR (“Corporate Social Responsibility”) activities—such as involvement in environmental issues—in order to gain trust and support from society. We believe that operating our business with due attention to CSR, and promoting activities that contribute to society in areas where we can make the most of Wacoal’s originality, is part of improving our brand power and establishing our competitive position.

Basic Policy Regarding the Distribution of Profits

With respect to our dividend policy, we will endeavor to continue our pattern of steady dividends, all the while giving consideration to the appropriate dividend payout.

Moreover, as part of increasing shareholder value and returning profits to shareholders, we have over the last four years repurchased and cancelled a total of 10,100,000 shares of the Company. We will continue to examine such measures in the future.

As regarding our internal reserves, we have actively invested in existing sales markets, developing new “SPA” (Special Retailer of Private Label Apparel) stores, developing points of contact with customers, and launching new overseas business locations. We hope that these efforts will benefit our shareholders by improving future profits.

Concept and Policy Regarding Lowering the Price of the Investment Unit

It is important that our group promotes the long-term stable retention of our company shares by investors, while also broadening our investor base. To do so, we believe lowering the price of the investment unit for the benefit of individual investors to be an effective measure. Going forward, taking stock market trends into consideration and examining the necessary costs and effects of this policy, we will proceed to take careful measures while attaching great importance to shareholders.

Measures for Business Targets

For the near future, our target is to achieve ROE (return on equity) of 6% or higher and an operating income margin of 9% or higher.

Our Medium- and Long-Term Business Strategy

To take the full advantage of limited management resources, we will “select and focus business operations” by concentrating management resources on competitive areas to increase profits, while also expanding our business operations by broadening the scope of such competitive areas and fields. In this respect, we have been conducting a positioning analysis of our business portfolio based on profitability and growth potential. As key factors in our future growth, we aim to further strengthen the market position of our Wacoal and Wing brand inner wear businesses, which are both highly profitable and showing stable growth, and at the same time increase the profitability of our catalogue, wellness and SPA businesses, which are expected to have growth potential but which have yet to achieve full profitability. We will implement three-year priority policies for the expansion of these business operations, and will actively invest in these areas.

With an aim towards corporate sustainability and social responsibility, we will develop a framework to address corporate ethics and environmental issues.

Priority Policies

(1)		Core brands (Wacoal and Wing)

		For our Wacoal brand, we will expand our points of contact with, and services to, customers by improving existing sales floors and developing “theme solution” operations (sales floors structured to meet the specific needs of customers) aimed at the middle-aged and senior market. Moving outside of the intimate apparel category, we will differentiate ourselves and enhance our competitiveness

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		by creating sales locations in the same complexes as our Wellness business. Through these activities, we will address decreasing sales in certain channels, and aim to improve operating profit margin through promoting structural reforms.

		For our Wing brand, including products that are part of our promotional campaigns, we will actively expand points of contact with customers by utilizing our catalogue and internet channels and launching direct sales stores in urban areas. As we look for new sales channels, we will invest in brand quality in order to maintain our position and competitiveness outside of existing chain stores, and we will seek to expand sales while maintaining our current operating profit ratio.

(2)		Promotion of SPA business

		We will increase the number of stores for four existing brands (une nana cool, Subito, Amphi and Sur la plage) and aim to achieve a profit in the fiscal year ending March 2007.

(3)		Promotion of Wellness business

		We will concentrate providing value in “comfort” and “health”, and create points of contact and sales floors based on each of these themes and that go beyond product categories. Area of business operations will be expanded to include “competitive sport” and “care” in addition to the current core area of “conditioning.” We will actively invest in the core brand “CW-X” to promote it as a worldwide strategic product. By implementing these policies, we aim to increase sales and improve the operating profit ratio.

(4)		Promotion of catalogue and internet sales

		In addition to catalogue sales, we plan on taking advantage of the rapid spread of the Internet to build new points of contact with customers, while also maintaining the operating profit ratio and working to increase sales.

(5)		Strategic investment in the Chinese market

		We do not intend to merely compete for sales in the mass market in China, but regard it as a future leading market in Asia and plan on investing in marketing to ensure high brand recognition. We will expand our business in China, with the aim to achieve a profit in the fiscal year ending March 2007.

Corporate Social Responsibility

(1)		Business compliance practices

		We believe that the practice of business compliance includes observance of laws and social standards, complying with internal controls based on the basic principles of our corporation, and sincerely responding to various social requirements. Since its establishment, Wacoal has strictly prohibited unlawful activities, and going forward will work to further strengthen our internal compliance system. Based on our “Corporate Ethics—Wacoal’s Action Agenda”, established for reviewing various corporate activities from the viewpoint of business compliance, and our “Code of Ethics for Officers and Employees”, established in response to the U.S. Sarbanes-Oxley Act, we will fully enforce business compliance internally, as well as at our domestic and overseas affiliates, while also responding to changes within and outside the company.

(2)		Promotion of environmental management

		Since fiscal year 2000, Wacoal has been working to build an environmental management system. In February 2001, we obtained ISO 14001 certification for both our Kyoto business office and for Nagasaki Wacoal Sewing Corp. (currently Kyushu Wacoal Manufacturing Corp.). Going forward, we will promote our environmental management system group-wide, with an aim towards giving the highest level of attention to environmental matters in the industry.

(3)		Promotion of social contribution activities

		Since 1974, we have been engaged in the “Remamma” business, providing innerwear and swimsuits developed for women who underwent mastectomy for breast cancer as well as free consultation and trial fitting throughout the country. Further, as a “Company to Co-exist with Women”, we have been engaged in social contribution activities through our “Pink Ribbon Project” (activities to promote the early detection of breast cancer).

6.		Status of and Basic Policy Regarding Corporate Governance

The goal of our basic corporate governance policy is to promote our corporate values in a stable manner, through improving management efficiency and transparency from the viewpoint of all stakeholders, including customers and shareholders.

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Specifically, we have reformed our corporate organization and meeting procedures to reinforce the decision-making and supervising authority of the board of directors and to clarify responsibilities for business operations. In June 2002, the Company introduced a new corporate officer system, and decreased the number of directors from 16 to 13. Since then, the number of directors has been further decreased to 8. In line with the introduction of the corporate officer system, we have established meetings of corporate officers to review the business plans of each business section, report quarterly results, and communicate various instructions and information. Currently, such meetings consist of the directors, 20 corporate officers, and 2 full time corporate auditors. When analyzing and reviewing business plans based on corporate-wide policy, the meetings are operated as business strategy meetings.

In order to increase transparency regarding managerial matters, we have enhanced our IR (“Investor Relations”) activities and made our utmost efforts to actively disclose information to our shareholders and investors. Furthermore, the Company established a Disclosure Committee in August 2003 to develop corporate governance and ensure the creditability of disclosures of financial information.

Regarding the implementation of corporate ethics practices, in April, 2002, we inaugurated our Corporate Ethics Implementation Committee, and enacted “Corporate Ethics—Wacoal’s Action Agenda” as a guideline for directors, corporate officers and employees. In addition, we have been working to promote corporate ethics through seminars. In addition, we enacted a “Code of Ethics for Directors and Employees” in May 2004, in response to the U.S. Sarbanes-Oxley Act.

The following chart shows our system of corporate governance.

(As of September 1, 2004)

(CHART)

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As of September 1, 2004

III. Business Results and Financial Condition

Business Results

During the six-month period ended September 30, 2004, the Japanese economy was recovering with improvement in corporate profits as well as strong consumer spending, such as the demand for home electronics products associated with the Olympic games. Overseas, the U.S. economy shows steady recovery and the Asian economy is moving from recovery to expansion.

Business results in the woman’s fashion industry were affected by lower turnout due to various factors including a long rainy season, a series of typhoons, broadcast of the Olympic games and the heat wave in the summer. As a result, overall business results were low.

In this environment, we sought to improve the strength of our products and to develop products centered on consumer needs focusing on innerwear while developing new points of contact with customers through directly managed stores. With respect to the Wacoal brand, the spring campaign product “Kanjiru Bra” and “Shakitto Bra”, the summer campaign product “T-Shirt Bra NAMI NAMI” and the autumn campaign product “Kanjiru Bra” and “Shakitto Bra”, were featured. These campaign products had been well received by consumers for their superior function and design, but did not reach the anticipated sales volume as they were the improved versions of the same product from the previous season and were not appealing enough as new products. As the overall retail industry faced lower turnout, our core product group including those campaign products showed slow sales. High quality brands “Parfage” and “Salute”, promoted through department store and boutique channels and high value-added brands “La Vie Aisée” and “Gra-P” innerwear, targeting the middle-aged and senior market, is showing steady results. As for our Wing brand, the spring campaign product “Natural Up Bra” and “Natural Fit Bra” were slightly below the sales target, while the summer campaign product “T-Shirts Bra” and autumn campaign product “Arrange Bra”, “Natural Fit Bra” and “Kyutto Up Bra” performed well and exceeded the sales target.

Aimed at developing new channels and points of contact with customers, the SPA business is starting to show steady development, with increased brand recognition and increase in both the number of stores and sales amount.

In other areas, our catalogue business struggled overall and fell short of last year’s results, except for internet sales. In our Wellness business, our main product, sports conditioning wear “CW-X” showed steady increase, thanks to an increase in brand recognition and active expansion of sales floors. In addition, “Wacoal Panty Stocking”, a collaborative product with Seven-Eleven Japan, Co., Ltd. launched in the spring 2004, showed favorable sales exceeding the target.

With regard to our overseas business, in Asian countries, the “T-Shirt Bra NAMI NAMI” Asian campaign involving the sale of the same product to China, Hong Kong and Taiwan simultaneously with Japan, performed well; however, there were also sales regions where sales were slow, such as Thailand, Korea and the Philippines. The U.S. market showed steady recovery and sales in middle and upscale department stores were favorable, which contributed to Wacoal America’s sales since it sold through those channels, but the yen-based results were affected by the rise of the yen and were below the results of the previous six-month period.

Consolidated sales for this six-month period were 83,242 million yen, a 1.3% decrease compared to the previous six-month period.

In terms of profit, in September 2004 we returned the substitutional portion of the employee pension fund of Wacoal Corp. to the Japanese government and reported 7,100 million yen as government subsidy and 928 million yen as additional net periodic pension cost from the return of such substitutional portion of the employee pension fund. As for the non-consolidated financial statements, 5,577 million yen was reported as extraordinary gains during the previous fiscal year as the gain from the return of the substitutional portion of the employee pension fund. As a result, operating income for this six-month period was 11,292 million yen, a 87.5% increase compared to the previous fiscal year.

Pre-tax net income for the current six-month period was 11,187 million yen, a 67.1% increase compared to the previous six-month period, and net income for the current six-month period was 6,495 million yen, a 46.8% increase compared to the previous six-month period.

Regarding sales by business category, current six-month period sales of “textile goods and related products” were 76,232 million yen, a 1.1% decrease compared to the previous six-month period. “Other” sales during the current six-month period were 7,010 million yen, a 3.9% decrease compared to the previous six-month period.

Regarding sales by location, “Japan” represented 74,381 million yen, accounting for 89.4% of group sales, whereas “Asia” accounted for 3.2% and “Europe and the U.S.” accounted for 7.4%.

Financial Condition

As a result of reporting net income of 6,495 million yen (including gains from the return of the substitutional portion of the employee pension fund which does not require any cost of cash) etc., cash flow from operating activities during this six-month period was 1,317 million yen.

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Cash flow relating to investing activities amounted to an expenditure of 1,516 million yen as a result of acquisition of securities, etc.

Cash flow related to financing activities amounted to an expenditure of 2,676 million yen, due mainly to the payment of dividends.

The balance of cash and cash equivalent for the end of this six-month period, calculated by the total of the above deducted by the exchange difference on cash and cash equivalents, was 24,599 million yen, a 2,844 million yen decrease compared to the previous fiscal year.

Free cash flow, which has been calculated by subtracting the amount of capital investment from operating activities cash flow, amounted to an expenditure of 321 million yen.

Trends in certain cash-flow indicators — Unaudited


	Six-Month Period		Fiscal Year		Six-Month Period
	ended September 30, 2003		ended March 31, 2004		ended September 30, 2004
Equity ratio (%)		74.7		76.0		78.4
Equity ratio based on the market value (%)		60.4		67.9		70.2
Debt redemption years (years)		—		0.8		—
Interest coverage ratio (times)		42.0		46.0		33.8

Equity ratio=shareholders’ equity/total assets

Equity ratio based on the market value=aggregate market value of shareholders’ equity/total assets

Debt redemption years=interest-bearing debt/cash flow from operating activities

Interest coverage ratio=cash flow from operating activities/interest payment

Forecast for the Fiscal Year End

Regarding overall business conditions, the domestic economy shows steady recovery as corporate revenues and business sentiment improve, and consumer spending is gently increasing, thanks to improved consumer confidence. As for other countries, the economy in Europe, U.S. and Asia has been recovering overall, although the effect of inflating oil prices cannot be ignored.

In the domestic women’s fashion industry, although improvement of consumer spending is expected due to economic recovery, sales of apparel in large-size retail stores are still low, and harsh market conditions are expected to continue.

Under these circumstances, the Wacoal group will make further efforts to develop products that are specific to each generation of consumers, and we will aggressively pursue our goal of increasing our points of contact with consumers based on our mid-term business plan.

Our target for the fiscal year end is to achieve sales of 164,000 million yen, operating income of 12,500 million yen, pre-tax net income of 12,200 million yen, and net income of 7,300 million yen.

Concerning the dividend for this fiscal year, as previously announced, the dividend payable is expected to be 15.00 yen per share.

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IV-1. Interim Consolidated Balance Sheet — Unaudited


	Current Six-Month Period			Previous Fiscal Year			Amount			Previous Six-Month Period
Accounts	As of Sept. 30, 2004			As of March 31, 2004			Increased/Decreased			As of Sept. 30, 2003
(Assets)	Million Yen			Million Yen			Million Yen			Million Yen
Current assets
Cash and bank deposits		7,157			6,847			310			16,784
Time deposits		17,442			20,596			(3,154	)		20,080
Marketable securities		40,303			44,316			(4,013	)		39,220
Receivables
Notes receivable		1,530			1,226			304			1,288
Accounts receivable — trade		23,258			19,053			4,205			23,577

		24,788			20,279			4,509			24,865
Allowance for returns and doubtful receivables		(2,867	)		(2,140	)		(727	)		(2,889	)

		21,921			18,139			3,782			21,976
Inventories		25,912			26,060			(148	)		25,956
Deferred tax assets		5,225			5,219			6			4,991
Other current assets		4,584			1,868			2,716			1,579

Total current assets		122,544			123,045			(501	)		130,586
Tangible fixed assets
Land		19,955			19,910			45			22,422
Buildings and structures		56,020			55,879			141			56,069
Machinery and equipment		12,339			12,413			(74	)		12,407
Construction in progress		958			370			588			40

		89,272			88,572			700			90,938
Accumulated depreciation		(39,242	)		(38,640	)		(602	)		(37,820	)

Net tangible fixed assets		50,030			49,932			98			53,118
Other assets
Investments in affiliated companies		12,772			12,838			(66	)		11,300
Investments		27,078			29,872			(2,794	)		24,481
Deferred tax assets		700			959			(259	)		849
Lease deposits and others		8,320			8,157			163			7,582

Total other assets		48,870			51,826			(2,956	)		44,212

Total Assets		221,444			224,803			(3,359	)		227,916

(Note) Increase or decrease shows the difference between the current six-month period and the previous fiscal year.

-10-


	Current Six-Month Period			Previous Fiscal Year			Amount			Previous Six-Month Period
Accounts	As of Sept. 30, 2004			As of March 31, 2004			Increased/Decreased			As of Sept. 30, 2003
(Liabilities, minority interests and shareholders’ equity)	Million Yen			Million Yen			Million Yen			Million Yen
Current Liabilities
Short-term bank loans		3,544			3,954			(410	)		5,558
Payables
Notes payable		2,388			2,885			(497	)		2,504
Accounts payable-trade		10,118			9,343			775			10,808

		12,506			12,228			278			13,312
Accounts payable		4,649			5,340			(691	)		4,197
Accrued payroll and bonuses		6,580			6,895			(315	)		7,235
Accrued corporate taxes, etc.		2,481			2,724			(243	)		3,320
Current portion of long-term debt		275			374			(99	)		193

Other current liabilities		2,530			1,579			951			1,705
Total current liabilities		32,565			33,094			(529	)		35,520
Long-term liabilities
Long-term debt		126			122			4			410
Customer deposits		788			805			(17	)		821
Reserves for retirement benefit		7,868			14,794			(6,926	)		17,620
Deferred tax liability		4,554			3,424			1,130			1,463

Total long-term liabilities		13,336			19,145			(5,809	)		20,314
Minority interests		1,882			1,806			76			1,735
Shareholders’ equity
Common stock		13,260			13,260			—			13,260
Additional paid-in capital		25,242			25,242			—			25,242
Retained earnings		134,277			129,941			4,336			133,912
Accumulated other comprehensive income (loss)
Foreign currency exchange adjustment		(3,649	)		(3,512	)		(137	)		(1,993	)
Unrealized gain/(loss) on securities		4,807			6,831			(2,024	)		3,512
Additional minimum pension liability		(222	)		(954	)		732			(3,541	)
Treasury stock		(54	)		(50	)		(4	)		(45	)

Total shareholders’ equity		173,661			170,758			2,903			170,347

Total liabilities, minority interests and shareholders’ equity		221,444			224,803			(3,359	)		227,916

(Note) Increase or decrease shows the difference between the current six-month period and the previous fiscal year.

-11-

IV-2. Interim Consolidated Income Statement — Unaudited


	Current Six-Month Period						Previous Six-Month Period									Previous Year
	From April 1, 2004						From April 1, 2003						Amount			From April 1, 2003
Accounts	To September 30, 2004						To September 30, 2003						Increased/Decreased			To March 31, 2004
	Million Yen			%			Million Yen			%			Million Yen			Million Yen			%
Sales		83,242			100.0			84,347			100.0			(1,105	)		163,155			100.0
Operating expenses
Cost of sales		41,914			50.3			42,348			50.2			(434	)		84,638			51.9
Selling, general and administrative expenses		37,136			44.6			35,978			42.7			1,158			72,927			44.7
Government subsidy		(7,100	)		(8.5	)		—			—			(7,100	)		—			—
Impairment charges on long-lived assets		—			—			—			—			—			2,574			1.6

Total operating expenses		71,950			86.4			78,326			92.9			(6,376	)		160,139			98.2

Operating income		11,292			13.6			6,021			7.1			5,271			3,016			1.8
Other income and (expenses)
Interest income		91			0.1			133			0.2			(42	)		225			0.1
Interest expense		(39	)		(0.0	)		(68	)		(0.1	)		29			(113	)		(0.0	)
Dividend income		151			0.2			124			0.2			27			256			0.2
Gain on sale of investment		16			0.0			436			0.5			(420	)		932			0.6
Valuation loss on investment in securities		(294	)		(0.4	)		(101	)		(0.1	)		(193	)		(142	)		(0.1	)
Others (net)		(30	)		(0.0	)		149			0.2			(179	)		358			0.2

Total other income (expense), net		(105	)		(0.1	)		673			0.9			(778	)		1,516			1.0

Income before income taxes, equity in net income of affiliated companies and minority interests		11,187			13.5			6,694			8.0			4,493			4,532			2.8

Income taxes
Current		2,717			3.3			3,547			4.2			(830	)		5,774			3.5
Deferred		2,295			2.8			(955	)		(1.1	)		3,250			(3,254	)		(2.0	)

Total income taxes		5,012			6.1			2,592			3.1			2,420			2,520			1.5

Income before equity in net income of affiliated companies and minority interests		6,175			7.4			4,102			4.9			2,073			2,012			1.3
Equity in net income of affiliated companies		463			0.6			382			0.4			81			1,032			0.6
Minority interests		(143	)		(0.2	)		(60	)		(0.1	)		(83	)		(142	)		(0.1	)

Net income		6,495			7.8			4,424			5.2			2,071			2,902			1.8

Earnings per share	45.12						30.18									19.85

(Note) Increase or decrease shows the difference between the current six-month period and the previous six-month period.

-12-

IV-3. Interim Consolidated Comprehensive Income Statement — Unaudited


	Current Six-Month Period			Previous Six-Month Period						Previous Fiscal Year
	From April 1, 2004			From April 1, 2003			Amount			From April 1, 2003
Accounts	To September 30, 2004			To September 30, 2003			Increased/Decreased			To March 31, 2004
	Million Yen			Million Yen			Million Yen			Million Yen
Net income		6,495			4,424			2,071			2,902

Other comprehensive income (loss) — after adjustment of tax effect
Foreign currency exchange adjustment		(137	)		(46	)		(91	)		(1,565	)
Net unrealized gain on securities		(2,024	)		4,358			(6,382	)		7,677
Minimum pension liability adjustment		732			2,752			(2,020	)		5,339

Total of other comprehensive income (loss)		(1,429	)		7,064			(8,493	)		11,451

Comprehensive income		5,066			11,488			(6,422	)		14,353

(Note) Increase or decrease shows the difference between the current six-month period and the previous six-month period.

-13-

IV-4. Interim Consolidated Shareholders’ Equity Statement — Unaudited

Current Six-Month Period


											Accumulated
	No. of shares					Additional					other
	held outside			Common		Paid-in		Retained			comprehensive			Treasury
	of company			Stock		Capital		Earnings			income			stock
				Million Yen		Million Yen		Million Yen			Million Yen			Million Yen
As of April 1, 2004		143,964			13,260		25,242		129,941			2,365			(50	)
Net income									6,495
Other comprehensive loss												(1,429	)
Cash dividends paid (15.0 yen per 1 share)									(2,159	)
Purchase of treasury stock		(4	)												(4	)

As of September 30, 2004		143,960			13,260		25,242		134,277			936			(54	)

Previous Six-Month Period


											Accumulated
	No. of shares					Additional					other
	held outside			Common		Paid-in		Retained			comprehensive			Treasury
	of company			Stock		Capital		Earnings			income			stock
				Million Yen		Million Yen		Million Yen			Million Yen			Million Yen
As of April 1, 2003		146,570			13,260		25,242		131,466			(9,086	)		(43	)
Net income									4,424
Other comprehensive income												7,064
Cash dividends paid (13.5 yen per 1 share)									(1,978	)
Purchase of treasury stock		(3	)												(2	)

As of September 30, 2003		146,567			13,260		25,242		133,912			(2,022	)		(45	)

Previous fiscal year


											Accumulated
	No. of shares					Additional					other
	held outside			Common		Paid-in		Retained			comprehensive			Treasury
	of company			Stock		Capital		Earnings			income			stock
				Million Yen		Million Yen		Million Yen			Million Yen			Million Yen
As of April 1, 2003		146,570			13,260		25,242		131,466			(9,086	)		(43	)
Net income									2,902
Other comprehensive income												11,451
Cash dividends paid (13.5 yen per 1 share)									(1,978	)
Retirement of treasury stock		(2,600	)						(2,449	)
Purchase of treasury stock		(6	)												(7	)

As of March 31, 2004		143,964			13,260		25,242		129,941			2,365			(50	)

-14-

IV-5. Interim Consolidated Cash Flow Statement — Unaudited


				Current			Previous
				Six-Month Period			Six-Month Period			Previous Fiscal Year
				From April 1, 2004			From April 1, 2003			From April 1, 2003
Accounts				To Sept. 30, 2004			To Sept. 30, 2003			To March 31, 2004
				Million Yen			Million Yen			Million Yen
I.			Operating activities
	1.		Net income		6,495			4,424			2,902
	2.		Adjustment of net income to cash flow from
			operating activities
		(1)	Depreciation and amortization		1,614			1,464			3,081
		(2)	Deferred taxes		2,295			(955	)		(3,254	)
		(3)	Gain/loss on sale of fixed assets		36			308			455
		(4)	Impairment loss on fixed assets		—			—			2,574
		(5)	Valuation loss on investment in securities		294			101			142
		(6)	Gain on sale of investment		(16	)		(436	)		(932	)
		(7)	Equity in net income of affiliated companies		(102	)		(116	)		(726	)
		(8)	Changes in assets and liabilities
			Increase in receivables		(4,513	)		(4,413	)		(46	)
			Decrease (increase) in inventories		145			(1,591	)		(2,124	)
			Decrease (increase) in other current assets		762			486			(346	)
			Increase (decrease) in payables		(177	)		1,067			1,020
			Increase (decrease) in reserves for retirement benefits		(5,684	)		1,644			3,212
			Increase (decrease) in accrued expenses and other current liabilities		(557	)		238			(657	)
		(9)	Others		725			638			(100	)

			Net cash flow from operating activities		1,317			2,859			5,201
II.			Investing activities
	1.		Proceeds from sale and redemption of marketable securities		23,873			32,279			59,977
	2.		Acquisition of marketable securities		(19,885	)		(22,810	)		(56,019	)
	3.		Proceeds from sales of fixed assets		29			265			369
	4.		Acquisition of tangible fixed assets		(1,638	)		(1,045	)		(2,338	)
	5.		Proceeds from sale and redemption of investments		25			487			2,130
	6.		Acquisition of investments in affiliated companies		(15	)		(253	)		(1,690	)
	7.		Acquisition of investments		(906	)		(5	)		(776	)
	8.		Increase in other assets		(2,999	)		(66	)		(325	)

			Net cash flow provided by (used in) investing activities		(1,516	)		8,852			1,328
III.			Financing activities
	1.		Decrease in short-term bank loans		(417	)		(114	)		(1,595	)
	2.		Proceeds from long-term debt		78			204			49
	3.		Repayment of long-term debt		(174	)		(212	)		(158	)
	4.		Purchase of treasury stock		(4	)		(2	)		(2,456	)
	5.		Dividends paid in cash		(2,159	)		(1,978	)		(1,978	)

			Net cash flow used in financing activities		(2,676	)		(2,102	)		(6,138	)

IV.			Effect of exchange rate on cash and cash equivalents		31			9			(194	)

V.			Increase/decrease in cash and cash equivalents		(2,844	)		9,618			197
VI.			Initial balance of cash and cash equivalents		27,443			27,246			27,246

VII.			Period (Year) end balance of cash and cash equivalents		24,599			36,864			27,443

Additional Information
			Cash paid for
			Interest		41			71			114
			Income taxes, etc.		2,960			3,023			5,846

-15-

IV-6. Basic Matters in Preparing Interim Consolidated Financial Statements

1.		Matters Regarding the Scope of Consolidation and Application of the Equity Method

		Major consolidated subsidiaries: Studio Five Corp., Kyushu Wacoal Sewing Corp., Torica Co., Ltd., Nanasai Co., Ltd., Wacoal International Corp., Wacoal America Inc., Wacoal France S.A., Wacoal Hong Kong Co., Ltd., Wacoal Investment Co., Ltd. and Wacoal China Co., Ltd.

		Major affiliated companies:

		Shinyoung Wacoal Inc., Taiwan Wacoal Co., Ltd. and Thai Wacoal Public Co., Ltd.

2.		Matters Regarding Changes in Consolidation

		Consolidation (excluded): Kumamoto Wacoal Sewing Corp.

3.		Standard of Preparation of Interim Consolidated Financial Statements

		The interim consolidated financial statements have been prepared based on terms, format and preparation methods in compliance with accounting standards generally accepted in the United States for the issuance of American Depositary Receipts (ADR)(hereinafter referred to as the “U.S. Accounting Standards”). Various laws and ordinances relating to accounting in the U.S. include Accounting Series Releases Regarding Reporting to and Filing with the Security Exchange Commission (Regulation S-X), and the U.S. Accounting Standards include the standard of the Financial Accounting Standards Board (FASB), the guidelines of the Accounting Principles Board (APB), and the Accounting Research Bulletin (ARB) of the Committee on Accounting Procedures, among others. Thus, the contents are different from what is prepared in accordance with the “Standards of Preparation of Interim Consolidated Financial Statements in Japan” and the “Rules of Preparation of Interim Consolidated Financial Statements.” However, the segment information has been prepared in accordance with the “Principles of Preparation of Interim Consolidated Financial Statements.”

4.		Significant Accounting Policies

(1)		Valuation Standard of Inventories

		The average cost method was mainly used for goods, products and supplies, and the first-in first-out method was used for raw materials, with both valued under the lower cost accounting method.

(2)		Valuation Standard of Tangible Fixed Assets and Method of Depreciation

		Tangible fixed assets are valued at its acquisition cost. Depreciation expenses are calculated mainly using the straight-line method based on the estimated useful lives of the assets (the lease term is used for capitalized leased assets).

(3)		Valuation Method of Marketable Securities and Investment Securities

		Based on the provisions of FASB Standard No. 115, marketable securities and investment securities have been classified as available for sale securities, and valued at its fair value. Moreover, unrealized valuation profit/loss is classified and included in accumulated other comprehensive income (loss) within shareholders’ equity.

(4)		Reserve for Retirement Benefits

		This is accounted for based on the provisions of FASB Standard No. 87.

		Further, as regarding the return of the substitutional portion of the employee pension fund, the Emerging Task Force Standards 03-2 “Accounting for the Transfer to the Japanese Government of the Substitutional Portion of Employee Pension Fund Liabilities” was applied.

(5)		Lease Transactions

		Based on the provisions of FASB Standard No. 13, capital leases have been capitalized at fair value of the lease payments and the corresponding unpaid liabilities have been reported.

(6)		Accounting Procedure for Consumption Tax, etc.

		Accounting procedure for consumption tax, etc., is based on the tax-excluded method.

(7)		Interim Consolidated Cash Flow Statement

		Upon preparing the consolidated cash flow statements, time deposits and certificate of deposits with original maturities of three (3) months or less have been included in cash and cash equivalents.

-16-

(Notes)

Market Value, etc. of Securities — Unaudited

(Unit: Million Yen)


	Current Six-Month period								Previous Six-Month Period								Previous Fiscal Year
	As of September 30, 2004								As of September 30, 2003								As of March 31, 2004
			Total		Total						Total		Total						Total		Total
	Acquisition		Unrealized		Unrealized		Fair		Acquisition		Unrealized		Unrealized		Fair		Acquisition		Unrealized		Unrealized		Fair
	Cost		Profit		Loss		Value		Cost		Profit		Loss		Value		Cost		Profit		Loss		Value
Securities
Government Bonds, local government bonds		4,324		10		1		4,333		2,726		0		12		2,714		2,722		2		4		2,720
Corporate Bonds		19,109		20		2		19,127		18,292		17		7		18,302		22,962		19		4		22,977
Bank Bonds		13,674		93		5		13,762		15,184		67		7		15,244		12,781		87		5		12,863
Trust Fund		3,065		38		22		3,081		2,924		40		4		2,960		5,722		43		9		5,756

Total		40,172		161		30		40,303		39,126		124		30		39,220		44,187		151		22		44,316

Investment Equities		15,873		10,563		167		26,269		15,718		8,578		161		24,135		15,457		13,805		6		29,256

Total		15,873		10,563		167		26,269		15,718		8,578		161		24,135		15,457		13,805		6		29,256

2.		Contract Amount, Market Value and Valuation Profit/Loss of Derivative Transactions

		In order to prepare for the fluctuation risk of the foreign currency exchange rate and interest, forward exchange contracts have been utilized as financial derivative products. There are forward exchange transactions (dollar-buying, yen-selling) which are non-market transactions. Nevertheless, indications thereof have been omitted as the valuation profit/loss and contract amounts are of little importance.

-17-

V. Segment Information — Unaudited

(1)

Segment Information by Type of Business

Current six-month period (April 1, 2004 to September 30, 2004)

(Unit: Million Yen)


		Textile goods and						Elimination or
		related products		Others		Total		corporate			Consolidated
Sales and operating income/loss
(1)	Sales to outside customers		76,232		7,010		83,242		—			83,242
(2)	Internal sales or transfer among segments		—		2,001		2,001		(2,001	)		—

	Total		76,232		9,011		85,243		(2,001	)		83,242

	Operating expenses		71,573		8,958		80,531		(8,581	)		71,950
	Operating income		4,659		53		4,712		6,580			11,292

Previous six-month period (April 1, 2003 to September 30, 2003)

(Unit: Million Yen)


		Textile goods and						Elimination or
		related products		Others		Total		corporate			Consolidated
Sales and operating income/loss
(1)	Sales to outside customers		77,052		7,295		84,347		—			84,347
(2)	Internal sales or transfer among segments		—		3,784		3,784		(3,784	)		—

	Total		77,052		11,079		88,131		(3,784	)		84,347

	Operating expenses		70,319		10,961		81,280		(2,954	)		78,326
	Operating income		6,733		118		6,851		(830	)		6,021

Previous fiscal year (April 1, 2003 to March 31, 2004)

(Unit: Million Yen)


		Textile goods and							Elimination or
		related products		Others			Total		corporate			Consolidated
Sales and operating income/loss
(1)	Sales to outside customers		146,945		16,210			163,155		—			163,155
(2)	Internal sales or transfer among segments		—		3,697			3,697		(3,697	)		—

	Total		146,945		19,907			166,852		(3,697	)		163,155

	Operating expenses		140,729		21,447			162,176		(2,037	)		160,139
	Operating income		6,216		(1,540	)		4,676		(1,660	)		3,016

-18-

(2)

Segment Information by Location

Current six-month period (April 1, 2004 to September 30, 2004)

(Unit: Million Yen)


									Elimination or
	Japan		Asia		Europe/U.S.		Total		corporate			Consolidated
Sales and operating income/loss
(1) Sales to outside customers		74,381		2,716		6,145		83,242		—			83,242
(2) Internal sales or transfer among segments		488		2,006		—		2,494		(2,494	)		—

Total		74,869		4,722		6,145		85,736		(2,494	)		83,242

Operating expenses		71,380		4,241		5,403		81,024		(9,074	)		71,950
Operating income		3,489		481		742		4,712		6,580			11,292

Previous six-month period (April 1, 2003 to September 30, 2003)

(Unit: Million Yen)


									Elimination or
	Japan		Asia		Europe/U.S.		Total		corporate			Consolidated
Sales and operating income/loss
(1) Sales to outside customers		75,245		2,651		6,451		84,347		—			84,347
(2) Internal sales or transfer among segments		476		1,965		—		2,441		(2,441	)		—

Total		75,721		4,616		6,451		86,788		(2,441	)		84,347

Operating expenses		69,903		4,285		5,749		79,937		(1,611	)		78,326
Operating income		5,818		331		702		6,851		(830	)		6,021

Previous fiscal year (April 1, 2003 to March 31, 2004)

(Unit: Million Yen)


									Elimination or
	Japan		Asia		Europe/U.S.		Total		corporate			Consolidated
Sales and operating income/loss
(1) Sales to outside customers		144,896		4,957		13,302		163,155		—			163,155
(2) Internal sales or transfer among segments		912		3,895		1		4,808		(4,808	)		—

Total		145,808		8,852		13,303		167,963		(4,808	)		163,155

Operating expenses		143,033		8,338		11,916		163,287		(3,148	)		160,139
Operating income		2,775		514		1,387		4,676		(1,660	)		3,016

(Note)	1.	Segment information is prepared based on the “Rules of Preparation of Interim Consolidated Financial Statements.”
	2.	Main countries and areas belonging to classifications other than Japan Asia: various countries of East Asia and Southeast Asia Europe/U.S.: the U.S. and various European countries

-19-

(3)

Overseas Sales

Current six-month period (April 1, 2004 to September 30, 2004)

(Unit: Million Yen)


	Asia			Europe/U.S.			Total
I. Overseas sales		2,716			6,145			8,861
II. Consolidated sales		—			—			83,242
III. Ratio of overseas sales in consolidated sales		3.2	%		7.4	%		10.6	%

Previous six-month period (April 1, 2003 to September 30, 2003)

(Unit: Million Yen)


	Asia			Europe/U.S.			Total
I. Overseas sales		2,651			6,451			9,102
II. Consolidated sales		—			—			84,347
III. Ratio of overseas sales in consolidated sales		3.1	%		7.7	%		10.8	%

Previous fiscal year (April 1, 2003 to March 31, 2004)

(Unit: Million Yen)


	Asia			Europe/U.S.			Total
I. Overseas sales		4,957			13,302			18,259
II. Consolidated sales		—			—			163,155
III. Ratio of overseas sales in consolidated sales		3.0	%		8.2	%		11.2	%

(Note)	1.	Segment information is prepared based on the “Rules of Preparation of Interim Consolidated Financial Statements.”
	2.	Main countries and areas belonging to classifications other than Japan Asia: various countries of East Asia and Southeast Asia Europe/U.S.: the U.S. and various European countries

-20-

VI. Status of Production and Sales — Unaudited

(1)

Production Results

Current Six-Month Period

Previous Year

Previous Fiscal Year

From April 1, 2004

From April 1, 2003

To September 30, 2004

To September 30, 2003

To March 31, 2004

Distribution

Segment name by type of business

Amount

Ratio

Amount

Ratio

Amount

Ratio

Million Yen

Textile goods and related products

35,213

100.0

36,731

100.0

70,572

100.0

(2)

Sales Results


		Current Six-Month Period				Previous Year				Previous Fiscal Year
		From April 1, 2004				From April 1, 2003				From April 1, 2003
		To September 30, 2004				To September 30, 2003				To March 31, 2004

				Distribution				Distribution				Distribution
Segment name by type of business		Amount		Ratio		Amount		Ratio		Amount		Ratio
		Million Yen			%	Million Yen			%	Million Yen			%
	Innerwear
	Foundation and lingerie		61,244		73.6		61,721		73.2		115,674		70.9
	Nightwear		5,364		6.4		6,117		7.2		11,823		7.2
Textile	Children’s underwear		1,247		1.5		1,226		1.5		2,583		1.6
goods
and	Subtotal		67,855		81.5		69,064		81.9		130,080		79.7
related
products	Outerwear/Sportswear		4,948		6.0		5,002		5.9		10,409		6.4

	Hosiery		1,064		1.3		736		0.9		1,798		1.1

	Other textile goods and related products		2,365		2.8		2,250		2.7		4,658		2.9

	Total		76,232		91.6		77,052		91.4		146,945		90.1

Others			7,010		8.4		7,295		8.6		16,210		9.9

Total			83,242		100.0		84,347		100.0		163,155		100.0

-21-

VII. Summary of Interim Non-Consolidated Financial Statements
for the First Half of the Fiscal Year Ending March 31, 2005

November 12, 2004


Listed Company: Wacoal Corporation				Stock Exchanges: Tokyo, Osaka
Code Number: 3591				Location of Principal Office: Kyoto
( URL http://www.wacoal.co.jp/ )


Representative:	Position: President and Director
	Name: Yoshitaka Tsukamoto
	Position: Corporate Officer; Director of Finance, Corporate Planning
	Name: Ikuo Otani Tel: (075) 682-1010

Date of Meeting of Board of Directors to Approve Interim Financial Statements: November 12, 2004
Existence of Interim Dividend System: None
Adoption of Unit Share System: Yes (1 Unit: 1,000 shares)

Results for the Six-Month Period Ended September 30, 2004 (April 1, 2004 to September 30, 2004) — Unaudited

(1)

Business Results — Unaudited (Note) Amounts less than 1 million yen have been rounded off.


	Sales					Operating Income					Ordinary Income
	Million Yen		%			Million Yen		%			Million Yen		%
Six-Month Period Ended September 30, 2004		68,451		(0.0	)		4,321		(22.6	)		5,492		(16.2	)
Six-Month Period Ended September 30, 2003		68,464		(1.1	)		5,581		(17.9	)		6,556		(15.5	)
Year Ended March 2004		128,496		(0.1	)		5,775		(29.3	)		7,152		(24.8	)


						Net Income
	Net Income					Per Share
	Million Yen		%			Yen
Six-Month Period Ended September 30, 2004		2,978		(22.1	)		20.69
Six-Month Period Ended September 30, 2003		3,824		0.4			26.09
Year Ended March 2004		4,035		33.9			27.34

(Note)		(i) Average number of shares during the period (year) ended: September 30, 2004: 143,961,474 shares September 30, 2003: 146,569,106 shares March 31, 2004: 146,226,674 shares
		(ii) Changes in accounting method: None
		(iii) Percentages indicated under sales, operating income, ordinary income and net income represent the increase/decrease compared to the previous six-month period.

(2)

Status of Dividends — Unaudited


	Interim Dividend Per Share		Annual Dividend Per Share
	Yen		Yen
Six-Month Period Ended September 30, 2004		—		—
Six-Month Period Ended September 30, 2003		—		—
Year Ended March 2004		—		15.00

(3)

Financial Status — Unaudited


			Total Shareholders’		Shareholders’		Shareholders’
	Total Assets		Equity		Equity Ratio		Equity Per Share
	Million Yen		Million Yen			%	Yen
Six-Month Period Ended September 30, 2004		196,328		160,950		82.0		1,118.02
Six-Month Period Ended September 30, 2003		201,804		161,610		80.1		1,102.64
Year Ended March 2004		198,070		162,311		81.9		1,127.18

(Note)

(i)     Number of outstanding shares at end of the year:
                    September 30, 2004: 143,960,102 shares
                    September 30, 2003: 146,567,476 shares
                    March 31, 2004: 143,963,825 shares
(ii)     Number of treasury stock at end of the year:
                    September 30, 2004: 56,583 shares
                    September 30, 2003: 49,209 shares

-22-

March 31, 2004: 52,860 shares

Forecast of Business Results for the Year Ending March 2005 (April 1, 2004 to March 31, 2005)

Annual Dividend Per Share

Sales

Operating Income

Net Income

Interim

End of Year

Million Yen

Yen

Annual

13,100

7,300

3,700

0.00

15.00

(Reference) Expected net income per share (annual basis): 25.44 yen
* The foregoing estimates are made based on information available as of the date this data was released, and actual results may significantly differ from estimates due to various factors arising in the future. Please refer to page 8 of the attachment for items relating to the foregoing estimates.

-23-

VIII-1. Interim Balance Sheet — Unaudited


	Current Six-Month Period				Previous Fiscal Year				Amounts			Previous Six-Month Period
Accounts	As of September 30, 2004				As of March 31, 2004				Increased/Decreased			As of September 30, 2003
(Assets)	Million Yen			%	Million Yen			%				Million Yen			%
I. Current Assets		92,524		47.1		91,602		46.2		922			101,096		50.1
Cash and bank deposits		19,979				22,307				(2,328	)		32,038
Trade notes		1,075				467				608			812
Trade accounts		17,981				13,975				4,005			17,347
Marketable securities		20,828				24,705				(3,876	)		21,978
Inventory assets		19,713				19,999				(286	)		18,633
Deferred income taxes		4,114				4,055				58			3,432
Others		10,194				7,095				3,098			6,929
Reserve for bad debts		(1,362	)			(1,005	)			(357	)		(75	)
II. Fixed Assets		103,803		52.9		106,468		53.8		(2,665	)		100,708		49.9
1. Tangible fixed assets		40,807		20.8		41,346		20.9		(539	)		44,874		22.2
Buildings		20,373				20,860				(487	)		21,271
Land		17,426				17,427				(0	)		20,450
Others		3,006				3,058				(52	)		3,152
2. Intangible fixed assets		3,197		1.6		3,079		1.6		118			2,675		1.3
3. Investment and other assets		59,798		30.5		62,042		31.3		(2,243	)		53,158		26.4
Investment securities		55,857				58,213				(2,356	)		48,963
Others		4,609				4,698				(88	)		4,934
Reserve for bad debts		(668	)			(869	)			201			(739	)

Total Assets		196,328		100.0		198,070		100.0		(1,742	)		201,804		100.0

(Note) Increase or decrease shows the difference between the current six-month period and the previous fiscal year.

-24-


	Current Six-Month Period						Previous Fiscal Year						Amounts			Previous Six-Month Period
Accounts	As of September 30, 2004						As of March 31, 2004						Increased/Decreased			As of September 30, 2003
(Liabilities)	Million Yen			%			Million Yen			%			Million Yen			Million Yen			%
I. Current Liabilities		29,168			14.8			27,678			14.0			1,490			29,660			14.7
Notes payable		806						875						(68	)		698
Accounts payable-trade		11,510						10,753						757			12,695
Accrued liability		5,485						5,790						(304	)		4,595
Accrued corporate taxes, etc.		2,100						2,442						(341	)		2,958
Accrued bonuses		3,000						3,000						—			3,260
Allowance for returns		2,290						1,500						790			2,190
Others		3,974						3,317						657			3,262
II. Long-term Liabilities		6,209			3.2			8,081			4.1			(1,871	)		10,532			5.2
Deferred tax liability		3,970						5,529						(1,559	)		3,058
Reserve for retirement benefits		1,043						1,332						(289	)		6,266
Reserve for officers retirement benefit		456						464						(8	)		437
Others		739						755						(15	)		770

Total Liabilities		35,377			18.0			35,759			18.1			(381	)		40,193			19.9

(Shareholders’ Equity)
I. Common stock		13,260			6.7			13,260			6.7			—			13,260			6.6
II. Additional paid-in capital		25,273			12.9			25,273			12.7			—			25,273			12.5
Capital reserve		25,273						25,273						—			25,273
III. Retained earnings		113,403			57.8			112,621			56.9			781			114,858			56.9
Retained earnings reserve		3,315						3,315						—			3,315
Additional paid-in capital		105,271						105,339						(67	)		105,339
Undistributed profits		4,816						3,967						849			6,203
IV. Other securities valuation difference		9,067			4.6			11,205			5.6			(2,138	)		8,263			4.1
V. Treasury stock		(54	)		(0.0	)		(49	)		(0.0	)		(4	)		(45	)		(0.0	)

Total Shareholders’ Equity		160,950			82.0			162,311			81.9			(1,361	)		161,610			80.1

Total Liabilities and Shareholders’ Equity		196,328			100.0			198,070			100.0			(1,742	)		201,804			100.0

(Note)

Increase or decrease shows the difference between the current six-month period and the previous fiscal year.

-25-

VIII-2. Interim Income Statement — Unaudited


	Current Six-Month Period					Previous Six-Month Period								Previous Fiscal Year
	From April 1, 2004					From April 1, 2003					Amounts			From April 1, 2003
Accounts	To September 30, 2004					To September 30, 2003					Increased/Decreased			To March 31, 2004
	Million Yen			%		Million Yen			%		Million Yen			Million Yen			%
I. Sales		68,451		100.0			68,464		100.0			(13	)		128,496		100.0
II. Cost of sales		35,072		51.2			34,630		50.6			442			65,941		51.3
Total income on sales		33,379		48.8			33,834		49.4			(455	)		62,554		48.7
III. Selling, general and administrative expenses		29,057		42.5			28,253		41.2			803			56,778		44.2

Operating income		4,321		6.3			5,581		8.2			(1,259	)		5,775		4.5

IV. Non-operating income		1,282		1.9			1,115		1.6			167			1,633		1.3
Interest income		110					145					(34	)		254
Dividends received		647					599					47			769
Others		524					370					154			609
V. Non-operating expenses		112		0.2			140		0.2			28			256		0.2
Interest expense		0					0					0			1
Others		111					139					(27	)		255

Current income		5,492		8.0			6,556		9.6			(1,063	)		7,152		5.6

VI. Extraordinary gains		33		0.0			464		0.6			(431	)		6,808		5.3
VII. Extraordinary loss		497		0.7			432		0.6			64			5,655		4.4

Pre-tax net income		5,028		7.3			6,588		9.6			(1,559	)		8,305		6.5
Corporate tax, resident tax and enterprise tax		2,176		3.2			3,057		4.4			(881	)		4,008		3.1
Previous fiscal year corporate tax, residence tax, and enterprise tax		—					—					—			760		0.6
Adjustment of corporate tax, etc.		(125	)	(0.2	)		(292	)	(0.4	)		166			(498	)	(0.3	)

Net income		2,978		4.3			3,824		5.6			(845	)		4,035		3.1
Profit carryforwards from previous year		1,837					2,379					(541	)		2,379
Retirement of treasury stock		—					—					—			2,448

Undistributed profits		4,816					6,203					(1,387	)		3,967

(Note)

Increase or decrease shows the difference between the current six-month period and the previous six-month period.

-26-

Basic Matters in Preparation of Interim Non-Consolidated Financial Statements

Valuation Standards and Method of Assets

(1)

Valuation standards and method of securities

			Stock of subsidiaries and affiliated companies: Cost accounting method based on moving average method
			Other securities:

Securities with market value: Market value method based on market price on closing day for the end of the interim period (Variance in valuation is processed based on method of directly including all shareholders’ equity, and cost of sales is calculated based on moving average method) Securities without market value: Cost accounting method based on moving average method

(2)

Valuation standard and method of inventories: Lower cost accounting method based on first-in first-out method

Depreciation Method of Fixed Assets

(1)

Tangible fixed assets: Constant percentage method (fixed amount method for buildings (excluding fixtures incidental to buildings) acquired on or after April 1, 1998). Durable years for major items are as follows.

Buildings and structures: 5 to 50 years
Machinery and vehicles: 6 to 12 years
Equipment and tools: 5 to 20 years

(2)

Intangible fixed assets: Fixed amount method. For the internal use of software in the Company, the fixed amount method based on the expected available period internally (5 years) is used.

Reserves

	(1)		Reserve for bad debts: In order to prepare for bad debt loss of accounts receivable and loans receivable, the estimated uncollectable amounts are reserved using the bad debt ratio for general accounts, and taking into consideration the possibility of collection on an individual basis for those accounts specified as being at risk of becoming uncollectable accounts.

	(2)		Accrued bonuses: In order to provide bonuses to employees, accrued bonuses are reserved based on the anticipated amount to be paid.

	(3)		Reserve for adjustment of returned goods: In order to clarify the corresponding relationship of sales and returns, the estimated loss accompanying future returned goods is reserved taking into consideration the percentage of prior returned goods.

	(4)		Reserve for retirement benefits: In order to prepare for retirement benefits for employees, based on retirement pay liabilities and pension assets as of the end of the current interim period, such amount is reserved.

	(5)		Reserve for officers retirement benefit: In order to prepare for expenditure of reserve for directors’ retirement benefit, a necessary interim period supply amount based on internal regulations relating to the supply of directors’ retirement benefit is reserved.

Processing Method of Lease Transactions

Finance lease transactions, other than those in which the ownership of the leased item is acknowledged to be transferred to the borrower, are processed pursuant to the accounting procedures applicable in an ordinary lease transaction.

Material Matters in Preparation of Other Financial Statements

			Accounting procedures for consumption tax, etc.

			Accounting procedures for consumption tax, etc. is per the tax-excluded method.

-27-

Notes — Unaudited


	(Current		(Previous
	Six-Month Period)		Six-Month Period		(Previous Fiscal Year)
1. Accumulated depreciation in tangible fixed assets		30,194		28,931		29,626
Accumulated depreciation includes accumulated impairment loss
2. Major items in extraordinary gains (Million Yen)
Gains on sales of fixed assets		18		28		28
Gain on sale of investment securities		15		436		1,202
Government subsidy		—		—		5,577
3. Major items in extraordinary loss (Million Yen)
Loss on sale of fixed assets		53		332		445
Impairment loss of fixed assets		—		—		3,046
Valuation loss of investment securities		15		—		—
Additional charge for optional retirement		252		—		167
Reversal of allowance of doubtful receivables		136		—		926
Valuation loss of subsidiary stock		39		100		466
Subsidiary support loss		—		—		603
4. Matters relating to lease transactions
(1) Financial lease other than transfer of ownership
(i) Acquisition cost equivalent, cumulative depreciation equivalent, and period (year) end balance equivalent (Million Yen)	(Tools and equipment)		(Tools and equipment)		(Tools and equipment)
Acquisition cost equivalent		149		472		417
Cumulative depreciation equivalent		126		372		368

Year end balance equivalent		23		99		49
Since the lease obligation represent a small percentage of the tangible fixed assets , the foregoing amounts have been calculated including interest portion.
(ii) Period (year) end balance equivalent of lease obligation (Million Yen)
Within one year		27		125		71
Over one year		14		38		23

Total		41		164		94
Since the lease obligation represent a small percentage of the tangible fixed assets , the foregoing amounts have been calculated including interest portion.
(iii) Lease fee paid (Million Yen)
Lease fee paid		53		77		149
Depreciation expense equivalent		25		51		105
(2) Operating lease
Unearned lease fee
Within one year		—		2		—
Over one year		—		—		—

Total		—		2		—
5. Breakdown of decrease in number of current year outstanding shares
Retirement of treasury stock by profit		—		—	2,600 thousand shares
Total stock acquisition cost		—		—	2,448 million yen
6. Shares of affiliated companies with market value (Million Yen)
Appropriation on balance sheet		2,699		1,263		2,699
Market value		5,981		4,435		5,623

Balance		3,281		3,172		2,923
7. Guarantee of liabilities of loans by subsidiary
Cover of management guidance letter		—		578		—
				(1 company)

-28-

Reference Material for the Interim Financial Statements for the First Half of the Fiscal Year Ending March 31, 2005

I.		Consolidated Results — Unaudited

		I-1. Changes in business results (three fiscal years and two most recent six-month periods)

(Unit: Million Yen)


	Fiscal Year ended March 31									Six-month period ended September 30
	2002			2003			2004			2003			2004
Sales		162,829			163,709			163,155			94,347			83,242
Cost of sales		86,567			85,306			84,638			42,348			41,914
Percentage of cost in sales		53.2	%		52.1	%		51.9	%		50.2	%		50.3	%
Selling, general and administrative expenses		69,076			71,139			75,501			35,978		(Note) 37,136
Percentage of selling, general and administrative expenses in sales		42.4	%		43.5	%		46.3	%		42.7	%	(Note) 44.6%
Government subsidy		—			—			—			—			7,100
Operating income		7,186			7,264			3,016			6,021			11,292

Net income		4,983			2,898			2,902			4,424			6,495

(Note) Selling, general and administrative expenses for the six-month period ended September 30, 2004 of 37,136 million yen, includes 928 million yen of additional net periodic pension cost from the return of the substitutional portion of the employee pension fund.

I-2. Changes in sales by product category (three fiscal years and two most recent six-month periods)

(Unit: Million Yen, %)


	Fiscal Year ended March 31
	2002						2003						2004
					Percentage over the						Percentage over the						Percentage over the
	Amount		Percentage		previous period		Amount		Percentage		previous period		Amount		Percentage		previous period
Foundation and lingerie		116,096		71.3		101		116,741		71.3		101		115,674		70.9		99
Nightwear		12,714		7.8		101		12,710		7.8		100		11,823		7.2		93
Children’s underwear		2,470		1.5		90		2,515		1.5		102		2,583		1.6		103

Innerwear Subtotal		131,280		80.6		101		131,966		80.6		101		130,080		79.7		99

Outerwear/Sportswear		9,588		5.9		103		9,440		5.8		98		10,409		6.4		110
Hosiery		1,777		1.1		108		1,672		1.0		94		1,798		1.1		108
Other textile goods and related products		3,793		2.3		89		4,299		2.6		113		4,658		2.9		108
Others		16,391		10.1		101		16,332		10.0		100		16,210		9.9		99

Total		162,829		100		100		163,709		100		101		163,155		100		100


	Six-month period ended September 30
	2003						2004
					Percentage over the						Percentage over the
	Amount		Percentage		previous period		Amount		Percentage		previous period
Foundation and lingerie		61,721		73.2		98		61,244		73.6		99
Nightwear		6,117		7.2		89		5,364		6.4		88
Children’s underwear		1,226		1.5		89		1,247		1.5		103

Innerwear Subtotal		69,064		81.9		97		67,855		81.5		98

Outerwear/Sportswear		5,002		5.9		97		4,948		6.0		99
Hosiery		736		0.9		93		1,064		1.3		145
Other textile goods and related products		2,250		2.7		114		2,365		2.8		105
Others		7,295		8.6		95		7,010		8.4		96

Total		84,347		100.0		97		83,242		100.0		99

(“Others” include mannequins, shop design and implementation, restaurant, culture, services, etc.)

-29-

Percentage of sales by product category

Six-month period ended September 30, 2004

(CHART)

Six-month period ended September 30, 2004

(CHART)

-30-

II.		Non-Consolidated Result — Unaudited

II-1.		Changes in business results (three fiscal years and two most recent six-month periods)

(Unit: Million Yen)


	Fiscal Year ended March 31									Six-month period ended September 30
	2002			2003			2004			2003			2004
Sales		128,431			128,641			128,496			68,464			68,451
Cost of sales		67,069			66,296			65,941			34,630			35,072
Percentage of cost in sales		52.2	%		51.5	%		51.3	%		50.6	%		51.2	%
Selling, general and administrative expenses		53,607			54,175			56,778			28,253			29,057
Percentage of selling, general and administrative expenses in sales		41.8	%		42.1	%		44.2	%		41.2	%		42.5	%
Operating income		7,754			8,169			5,775			5,581			4,321

Net income		4,804			3,013			4,035			3,824			2,978

II-2.

Changes in sales by sales channels (three fiscal years and two most recent six-month periods)

(Unit: Million Yen, %)


	Fiscal Year ended March 31
	2002							2003							2004
						Percentage over the							Percentage over the							Percentage over the
	Amount		Percentage			previous period		Amount		Percentage			previous period		Amount		Percentage			previous period
Department stores		47,678		37.1	%		103		47,488		36.9	%		100		44,428		34.6	%		94
General merchandising stores		45,739		35.6	%		99		46,912		36.5	%		103		46,544		36.2	%		99
Boutiques and retail stores		17,881		13.9	%		96		16,605		12.9	%		93		16,382		12.7	%		99
Mail order and direct sales		17,133		13.3	%		99		17,636		13.7	%		103		21,142		16.5	%		120

Total		128,431		100.0	%		100		128,641		100.0	%		100		128,496		100.0	%		100


	Six-month period ended September 30
	2003							2004
						Percentage over the							Percentage over the
	Amount		Percentage			previous period		Amount		Percentage			previous period
Department stores		23,881		34.9	%		96		23,308		34.1	%		98
General merchandising stores		26,369		38.5	%		101		26,165		38.2	%		99
Boutiques and retail stores		9,365		13.7	%		98		8,703		12.7	%		93
Mail order, direct sales and others		8,849		12.9	%		102		10,275		15.0	%		116

Total		68,464		100.0	%		99		68,451		100.0	%		100

“Mail order, direct sales and others” include sales at the company’s own stores, catalogue sales, Remamma, Dublevé and cultural projects.

-31-

Interim Consolidated and Non-consolidated Financial Information for the First Half of the Fiscal Year Ending March 31, 2005

Exhibit Index

Interim Consolidated and Non-consolidated Financial Information for the First Half of the Fiscal Year Ending March 31, 2005