Will the strong first quarter carry through to the full H1 and the revised plan?

Revenue for the first quarter of the fiscal year ending March 2027 was ¥3,350.224 million and operating profit was ¥93.656 million, up 12.8% and 109.2%, respectively, year on year. The operating margin rose from approximately 1.5% in the year-earlier quarter to approximately 2.8%, indicating that, at least in the first quarter alone, revenue growth translated into profit growth. The company attributed the revenue expansion to new products, existing categories and overseas operations in the Product Business, and to customer traffic, average spend per customer and new store openings in the Store Business.

The FY2027 full-year forecasts presented as of June were revenue of ¥12,500 million, operating profit of ¥70 million, ordinary loss of ¥110 million and net loss attributable to owners of the parent of ¥141 million. On a simple comparison with the first-quarter results, revenue represents 26.8% of the full-year forecast and operating profit represents 133.8%. However, the seasonality of the food and restaurant businesses and changes in raw material, labor and logistics costs from the second quarter onward cannot be disaggregated from the disclosed figures alone. The first quarter's operating profit exceeding the full-year forecast therefore cannot immediately be regarded as an upside for the full year.

Profit attributable to owners of the parent was only approximately ¥12 million in the first quarter, leaving a substantial gap from operating profit of ¥93.656 million. Ordinary profit was ¥64.022 million, indicating that non-operating gains and losses reduced operating profit. The previous full-year forecast, by contrast, was an ordinary loss of ¥110 million and a final loss of ¥141 million. The H1 results therefore need to be reviewed not only for operating profit progress, but also for the extent to which borrowing-related costs and other non-operating factors remain.

The earnings forecasts were revised on 13 November, but the information currently available does not include the revised amounts for the four items or details of the reasons for the revision. Accordingly, the H1 results will need to be assessed as an integrated set of figures, including six-month revenue, operating profit, ordinary profit and net profit, progress rates against the revised full-year forecasts, and whether the first quarter's strength continues in the Product Business, the Store Business or both.