Revenue increased, but profit fell sharply, requiring a rapid recovery in the second half to meet the full-year forecast

Revenue for the six months ended June 2026 was ¥59,410 million, up 4.8% from ¥56,686 million in the same period of the previous year. However, operating profit was ¥297 million, down 75.3% from ¥1,202 million, while ordinary profit was ¥458 million. Interim net loss attributable to owners of the parent was ¥74 million. The operating margin declined from approximately 2.1% in the same period of the previous year to approximately 0.5% in the current interim period, indicating that higher revenue has not translated into profit.

The company maintained its forecasts of revenue of ¥125,000 million, operating profit of ¥3,200 million, ordinary profit of ¥3,650 million and net profit attributable to owners of the parent of ¥2,100 million for the full year. Revenue progress at the interim stage was approximately 47.5%, close to the halfway point, while operating profit progress was approximately 9.3% and ordinary profit progress approximately 12.5%. To meet the full-year forecasts, the company must generate operating profit of ¥2,903 million in the second half, an increase of approximately ¥1,265 million, or approximately 77%, from the ¥1,638 million recorded in the second half of the previous year.

The company cited increases in raw material costs and other expenses, depreciation associated with new capital investment, and the impact of revisions to product specifications and prices as factors behind the deterioration in profit. The interim disclosure did not provide an operating profit bridge breaking down raw material costs, depreciation, logistics expenses and the impact of price revisions on a monetary basis. In Q3, it will be necessary to assess whether cost inflation in the confectionery business has peaked, whether changes to prices and specifications have further reduced sales volumes, and whether cumulative operating profit progress is approaching the full-year forecast.

The annual dividend forecast remains unchanged at ¥30 per share, and no quantitative shareholder return policy, such as a payout ratio or DOE, has been disclosed. As the company enters Q3 with its earnings and dividend forecasts unchanged, the focus will be not only on whether the forecasts are maintained, but also on whether the results announcement provides an explanation of the assumptions behind the expected second-half operating profit of ¥2,903 million and the likelihood of achieving it. In addition, neither supplementary financial results materials nor a results briefing has been provided, so it will also be important to see how specifically the regular financial results summary describes the drivers of the second-half recovery.