Recovery in Performance to Pre-Pandemic Levels and Further Growth

「In May 2024, the Group formulated the “2024-2027 Medium-Term Management Plan” and has pursued ① leading the industry as a leading company in comprehensive sports clubs and ② creating medium- to long-term growth drivers beyond the fitness industry as key themes. However, in light of performance progress to date and the outlook ahead, achieving the initial targets is expected to be difficult.」

「Operating profit was ¥340 million and ordinary profit was ¥170 million in the second quarter alone, indicating a recovery trend. However, this was insufficient to offset the weak start in April and May. For the interim consolidated period, revenue was ¥31.702 billion, up 1.1% year on year; operating profit was ¥59 million, down 93.0%; and ordinary loss was ¥348 million.」

「For the consolidated fiscal year, revenue was ¥63.737 billion, up 46.1% year on year; operating profit was ¥1.946 billion, up 54.3%; ordinary profit was ¥1.224 billion, up 117.4%; and net income attributable to owners of the parent was ¥766 million, up 21.0%.」

「Revenue was ¥31.367 billion, up 48.3% year on year; operating profit was ¥874 million, up 210.2%; ordinary profit was ¥468 million, up 118.9%; and interim net income attributable to owners of the parent was ¥222 million, up 47.5%.」

「As a result, revenue for the nine months was ¥3.2422 billion, up 7.0% year on year; operating profit was ¥1.055 billion, up 111.9%; ordinary profit was ¥862 million, up 276.3%; and net profit attributable to owners of the parent was ¥614 million, an improvement of ¥602 million from the same period of the previous year.」

「For the cumulative second quarter of the current consolidated fiscal year, revenue was ¥21.155 billion, up 6.4% year on year; operating profit was ¥281 million, up 191.6%; ordinary profit was ¥214 million, up 763.9%; and quarterly net income attributable to owners of the parent was ¥150 million, an improvement of ¥144 million year on year.」

「After the classification of COVID-19 under the Infectious Disease Control Law changed and various restrictions were eased on 8 May, new memberships and active memberships at sports clubs performed well, and revenue exceeded the plan. Although utility costs remained elevated, company-wide energy-saving measures and the government’s program to mitigate sharp increases in electricity and gas prices kept costs well below the plan.」

「On the other hand, expenses exceeded initial expectations because of higher utility costs and other factors. In addition, impairment losses of ¥599 million and the write-down of deferred tax assets resulted in an income taxes—deferred expense of ¥749 million.」

「The number of new fitness members remained strong, and enrolled membership at the end of the third quarter of the current consolidated fiscal year was 370,173, including 32,818 online members, up 12.7% year on year.」

「As a result, for the cumulative second quarter, revenue was ¥19.889 billion, up 12.7% year on year; operating profit was ¥96 million, up 89.5%; ordinary profit was ¥24 million, an improvement of ¥158 million and a return to profitability; and quarterly net income attributable to owners of the parent was ¥6 million, an improvement of ¥89 million and a return to profitability.」

「As a result, revenue for the first quarter was ¥974.1 million, up 18.6% year on year; operating loss was ¥54 million, an improvement of ¥347 million; ordinary loss was ¥62 million, an improvement of ¥433 million; and net loss attributable to owners of the parent was ¥21 million, an improvement of ¥872 million.」

「Revenue was ¥3.712 billion, up 22.9% year on year. Operating profit was ¥912 million, compared with an operating loss of ¥4.602 billion in the previous year; ordinary profit was ¥632 million, compared with an ordinary loss of ¥4.902 billion; and net profit attributable to owners of the parent was ¥513 million, compared with a net loss attributable to owners of the parent of ¥8.705 billion.」

「After the state of emergency was lifted in October, the number of users gradually recovered. Revenue was ¥27.505 billion, up 28.1% year on year; operating profit was ¥726 million, an improvement of ¥4.120 billion year on year; ordinary profit was ¥468 million, an improvement of ¥4.118 billion; and quarterly net income attributable to owners of the parent was ¥485 million, an improvement of ¥3.974 billion.」

「From June, domestic facilities resumed normal operations with infection-control measures in place. Revenue was ¥17.650 billion, up 40.7% year on year, and operating profit was ¥51 million, an improvement of ¥2.967 billion year on year and a return to profitability. The ordinary loss was ¥133 million, an improvement of ¥2.932 billion, and the net loss attributable to owners of the parent was ¥83 million, an improvement of ¥2.981 billion.」

「Revenue was ¥821.1 million, up 115.3% year on year. Operating loss was ¥402 million, compared with an operating loss of ¥1.970 billion in the same period of the previous year, and ordinary loss was ¥496 million, compared with an ordinary loss of ¥2.041 billion. Results improved at a faster pace than initially expected.」

「We forecast that, from the second half of the next consolidated fiscal year onward, the consumer environment will gradually improve as vaccination progresses and efforts to promote exercise to prevent the secondary health damage emerging as a social issue gain momentum, and that conditions will recover to pre-pandemic levels during the 5-year performance forecast period approved by the Board of Directors.」

「Following the lifting of the state of emergency, we resumed operations at sports clubs and other facilities in June. However, in view of the decline in new memberships and increases in cancellations and membership suspensions, we forecast that, together with a recovery in the number of active members, a review of facility operating costs and businesses that do not rely solely on visits to facilities, including new online-focused contactless services, will bring performance close to pre-pandemic levels by March 2021 after the pandemic subsides.」

「The timing of the end of the COVID-19 pandemic remains uncertain, and with the possibility of a second or third wave, we are unable to formulate a forecast for performance from the second quarter onward.」

「We will establish the necessary facility systems, review our cost structure, and work under a new management structure to restore performance and achieve further growth, so that members of sports clubs and other facilities, including those on leave, can resume using them with confidence. We forecast that performance will return to pre-pandemic levels by March 2021 after the COVID-19 pandemic subsides.」