Revenue growth, but a sharp recovery in Q4 is needed to achieve the full-year operating profit forecast

Revenue for the nine months ended FY2026 Q3 was ¥7,483 million, up 8.9% from ¥6,873 million in the same period of the previous year. Sales of bridal-related products, standard products and bullion products, as well as e-commerce sales, contributed to revenue growth, while operating profit fell 41.3% to ¥87 million from ¥149 million a year earlier. Operating profit declined despite revenue growth, so it is necessary to examine the profit structure, including costs and SG&A expenses, rather than assume a simple recovery in demand.

The full-year forecasts remain unchanged at revenue of ¥10,100 million, operating profit of ¥330 million, ordinary profit of ¥260 million and net income attributable to owners of the parent of ¥160 million. Revenue progress was 74.1%, broadly in line with the full-year forecast for the nine months ended Q3, while progress was only 26.4% for operating profit, 36.5% for ordinary profit and 13.1% for net income. The profit required in Q4 is ¥243 million in operating profit, ¥165 million in ordinary profit and ¥139 million in net income.

FY2025 operating profit for the nine months ended Q3 was ¥149 million, compared with full-year actual operating profit of ¥289 million, implying Q4 operating profit of approximately ¥140 million. By contrast, FY2026 requires ¥243 million in Q4 alone. For revenue, FY2025 Q4 actual revenue was approximately ¥2,530 million, calculated by subtracting ¥6,873 million for the nine months ended Q3 from full-year revenue of ¥9,403 million. The ¥2,617 million required in FY2026 therefore represents an increase of approximately 3.4% year on year. The required recovery in profit is extremely large relative to the required increase in revenue.

The company has cited soaring raw material prices, insufficient access to platinum materials, delays in price revisions, and higher personnel, selling and administrative expenses and outsourcing costs related to the new core system as factors behind the decline in profit. Accordingly, the Q4 review must distinguish between additional revenue, the extent to which price revisions have been reflected in the gross margin, whether supply constraints on platinum products have been resolved, and whether the rate of SG&A growth has slowed.

In the next full-year results, it will be important to disclose standalone Q4 revenue, gross profit and operating profit in a form that allows comparison with the same quarter of the previous year, in addition to whether the forecasts were achieved. In particular, it would be useful to confirm by amount or rate whether the decline in profit for the nine months ended Q3 was temporary and caused by raw material and system costs, or whether insufficient price pass-through and product-mix issues remain.