Will the return to profitability continue in FY2026? FY2027 guidance calls for lower revenue and earnings

In FY2026, revenue was ¥23,353 million, operating income was ¥919 million, ordinary income was ¥858 million, and net income attributable to owners of the parent was ¥736 million, bringing all three levels of profit into positive territory. Revenue fell 6.4% year on year, but the operating margin improved from negative 3.7% to 3.9%. The company attributed the improvement mainly to higher gross margin and lower SG&A expenses. The key point is that profitability improved without a recovery in revenue scale.

On a cumulative quarterly basis, FY2026-Q1 revenue was ¥5,664 million and operating income was ¥175 million. First-half revenue was ¥10,784 million and operating income was ¥167 million, while nine-month revenue was ¥17,554 million and operating income was ¥671 million. Full-year revenue and operating income rose to ¥23,353 million and ¥919 million, respectively, indicating that a significant amount of profit accumulated in the second half. In the next Q1, it will be necessary to determine whether margin improvement continues despite lower revenue, using the year-ago figures of ¥5,664 million in revenue and ¥175 million in operating income as the reference point.

The company’s FY2027 forecast calls for revenue of ¥21,881 million, operating income of ¥504 million, ordinary income of ¥319 million, and net income of ¥126 million. Year on year, these represent declines of 6.3% in revenue, 45.1% in operating income, 62.8% in ordinary income, and 82.8% in net income, respectively. In the next Q1, the question is not simply whether the company remained profitable, but whether it can secure operating income above the ¥175 million recorded in FY2026-Q1 and maintain its full-year operating income target of ¥504 million. Profit contributions from stores, POPUPs, and e-commerce are not disclosed, making an explanation of the specific changes in gross margin and SG&A expenses important.