FY2026 full-year forecast revised unusually: lower revenue, improved operating profit, and a sharp drop in net profit

For the 9-month period of FY2026 ending September, revenue was ¥16,419 million, down 2.0% year on year, while operating profit was ¥936 million, down 48.6%. In the same period of the previous year, revenue was ¥16,760 million and operating profit was ¥1,823 million, so the operating margin fell approximately 5.2 percentage points, from approximately 10.9% to approximately 5.7%. Profit contracted by more than revenue, making it more important in the next full-year disclosure to determine whether the decline in margins stopped in the fourth quarter than whether revenue recovered.

As of the third quarter, the full-year forecasts were revenue of ¥21,950 million, operating profit of ¥1,075 million, ordinary profit of ¥875 million and profit attributable to owners of the parent of ¥500 million. In the latest revision, revenue was lowered by ¥170 million to ¥21,780 million, while operating profit and ordinary profit were raised to ¥1,145 million and ¥940 million, respectively. This represents approximately a 0.8% decrease in revenue, a 6.5% increase in operating profit and a 7.4% increase in ordinary profit versus the previous forecasts, suggesting that cost controls in the second half have been reflected when looking only at operating and ordinary profit.

Meanwhile, the net profit forecast fell by ¥460 million, or approximately 92%, from ¥500 million to ¥40 million. The latest disclosure indicates that an extraordinary loss was recognized, but does not specify its amount, nature, affected assets or final impact after tax. In the next results announcement, it will be necessary to determine whether this relates to impairment of fixed assets, goodwill or customer-related assets, store closures or relocations, or other one-time expenses, and whether the improvement in operating profit was offset by a one-time loss.

On a simple subtraction basis, the fourth-quarter figures required to meet the full-year forecast from the 9-month results are revenue of ¥5,361 million, operating profit of ¥209 million and ordinary profit of ¥153 million. By contrast, the full-year net profit forecast of ¥40 million is below the 9-month result of ¥378 million, implying a net loss of approximately ¥338 million in the fourth quarter. The full-year results will need to confirm whether the actual figures follow this subtraction, whether additional extraordinary losses are recorded, and whether the cost controls included in the latest forecasts are structural.