Can the weak start in Q1 be recovered in time to meet the full-year plan?

Q1 FY2027 revenue was ¥5,489.040 million, down ¥170.680 million, or 3.0%, from ¥5,659.721 million in the same quarter of the previous year. The operating loss widened by ¥57.433 million to ¥1,200.956 million from ¥1,143.523 million, while the ordinary loss was ¥1,166.577 million and the net loss for the quarter was ¥827.474 million. The operating loss deteriorated more than the decline in revenue, with the Q1 operating margin falling from approximately negative 20.2% in the same quarter of the previous year to approximately negative 21.9%.

The company left its full-year forecasts unchanged at revenue of ¥37,700 million, operating profit of ¥1,400 million, ordinary profit of ¥1,600 million and net profit of ¥950 million. Q1 revenue progress was approximately 14.6%, calculated as ¥5,489.040 million divided by ¥37,700 million, approximately 10.4 percentage points below the simple 25% elapsed-period benchmark. If the forecasts remain unchanged, the company would need to generate ¥32,210.960 million in revenue and ¥2,600.956 million in operating profit over the remaining three quarters. This requires not only a recovery in first-half revenue but also a shift from losses to profit generation.

However, the company has not disclosed separate first-half targets for revenue or operating profit. Accordingly, the simple half-year benchmarks of ¥18,850 million in revenue and ¥700 million in operating profit are not company targets but merely mechanical measures of progress. As Q1 recorded an operating loss of ¥1,200.956 million, Q2 alone would need to generate approximately ¥1,900.956 million in operating profit for cumulative first-half operating profit to reach the mechanical half-year benchmark.

The main factor behind the Q1 revenue decline was the confectionery business, whose revenue fell 8.5% year on year due in part to the discontinuation of certain private-label products. The company described measures including the launch of the new product “Mizu Manju,” tastings and sampling, promotional events and proposals to expand distribution channels, but did not disclose how many millions of yen these measures are expected to add to revenue. At the Q2 results announcement, it will be necessary to assess whether the decline in confectionery revenue narrows, whether revenue growth in the food business continues, and whether first-half profit reaches a level sufficient to maintain the full-year forecasts.