FY2027 ending May 2027: operating profit expected to decline despite flat sales; first confirm bottoming in Q1

FY2026 consolidated revenue was ¥56.182 billion, down 2.6% year on year, while operating profit was ¥4.619 billion, down 21.8%. Ordinary profit was ¥4.857 billion and net income attributable to owners of the parent was ¥2.845 billion, down 18.9% and 23.8%, respectively. The operating margin also fell from 10.2% to 8.2%, confirming deterioration involving profitability rather than merely a temporary fluctuation in sales.

By contrast, the company’s FY2027 forecast calls for revenue of ¥56.5 billion, operating profit of ¥4.0 billion, ordinary profit of ¥4.0 billion and net income of ¥2.5 billion. Revenue is expected to rise 0.6% from FY2026, but the plan assumes declines of 13.4% in operating profit, 17.7% in ordinary profit and 12.2% in net income, indicating that a slight recovery in sales alone will not restore earnings. Japan is the sole reported segment, and profit contributions by region and business are not disclosed. Accordingly, gross margin and the SG&A ratio for the company as a whole will be key indicators in the next results release when assessing the validity of the earnings forecast.

In the year-earlier FY2026-Q1, revenue was ¥13.899 billion and operating profit was ¥1.205 billion. If FY2027-Q1 revenue returns to year-on-year growth and operating profit reaches at least ¥1.205 billion, concern over downside risk to the full-year forecast for lower operating profit will recede further. Assuming a simple even quarterly allocation, 25% of the full-year revenue forecast of ¥56.5 billion is ¥14.125 billion, and 25% of the ¥4.0 billion operating profit forecast is ¥1.0 billion. However, apparel is highly seasonal, so these levels should be treated as reference benchmarks for tracking progress, not as the company’s plan.