Revenue growth is on track for the full-year plan, but earnings progress and operating margin recovery are the key FY2027-H1 inflection points

Revenue in FY2026 was ¥37,711 million and operating profit was ¥2,209 million, representing higher revenue but lower profit than the previous year's ¥35,332 million and ¥2,638 million, respectively. The operating margin also declined by 1.6 percentage points, from 7.5% to 5.9%. In the first quarter of FY2027, revenue was ¥9,888 million and operating profit was ¥511 million, up 10.1% and 1.2% year on year, respectively. The operating margin was 5.2% based on the reported figures, below approximately 5.6% in the same period last year.

The first-quarter progress rates against the full-year forecasts were approximately 24.1% for revenue, calculated as ¥9,888 million ÷ ¥41,100 million, and 20.4% for operating profit, calculated as ¥511 million ÷ ¥2,500 million. Revenue was close to the simple 25% benchmark for one quarter, while profit progress was below that level. The simple 50% first-half benchmarks are ¥20,550 million for revenue and ¥1,250 million for operating profit. However, these are not the company's plans incorporating seasonality, so full-year performance should not be judged mechanically based only on whether these figures are reached. The gap between revenue and profit progress also needs to be assessed.

The company cited spring leisure demand, the holiday period, inbound tourism demand, improvements in product quality and menu composition, and customer traffic initiatives through its app and social media as factors behind first-quarter revenue growth. At the same time, higher raw material prices, logistics costs and labor costs have continued. The amounts by which the demand and cost factors affected revenue and operating profit have not been disclosed, and the ¥9,888 million increase in revenue cannot be broken down into customer traffic, average spending per customer or store count.

At the next earnings announcement, the focus will be on first-half revenue and operating profit, as well as whether the operating margin recovers from 5.2% to above the 5.6% level recorded in the same period last year. If revenue exceeds ¥20,550 million but operating profit falls below ¥1,250 million, substantial profit improvement will be required in the second half to meet the full-year operating profit forecast of ¥2,500 million. Conversely, if margin improvement and maintenance of the full-year forecast are confirmed together, it will be easier to assess whether first-quarter revenue growth was driven by more than temporary demand factors.