Can the FY2027-H1 repeat the Q1 profit-led performance in Q2?

In FY2027-Q1, revenue was ¥10.378 billion, up 2.6% year on year, operating profit was ¥570 million, up 137.6%, ordinary profit was ¥560 million, up 128.4%, and profit attributable to owners of the parent was ¥306 million, up 123.5%. Profit growth significantly outpaced revenue growth, lifting the operating margin to approximately 5.5%. The company attributed this mainly to lower costs and improved yield in the Food business, and the disposal of unprofitable stores and optimization of selling, general and administrative expenses in the Food Service business, but did not disclose the increase in profit by individual factor.

The company revised its FY2027-H1 forecast to revenue of ¥20.500 billion, operating profit of ¥720 million, ordinary profit of ¥670 million and net profit of ¥370 million. A simple calculation of the difference from Q1 actual results indicates that Q2 needs to generate revenue of ¥10.122 billion, operating profit of ¥150 million, ordinary profit of ¥110 million and net profit of ¥64 million. Accordingly, Q1 operating profit of ¥570 million represents approximately 79.2% of the first-half forecast. This is progress calculated from the difference between the first-half forecast and Q1 actual results, however, not seasonality or a quarterly plan presented by the company.

The standalone operating margin calculated from the amount required in Q2 is approximately 1.5%, well below Q1's 5.5%. This does not mean that the Q2 margin will actually decline, but the first-half results will need to distinguish whether Q1's high margin reflected structural improvement from higher productivity and lower waste, or the timing of promotional activity and expense recognition. In particular, Q1 provided only a qualitative explanation of the factors behind the change in operating profit, without a quantitative breakdown of advertising expenses, raw material costs, production volume or the effects of store closures.

Based on the difference from the full-year forecast, after achieving the first-half forecast, FY2027-H2 will need to generate revenue of ¥22.500 billion, operating profit of ¥530 million, ordinary profit of ¥440 million and net profit of ¥85 million. In the first-half results, we will look not only at whether Q2 actual results reached the first-half forecast, but also at whether the company maintains its full-year forecast of ¥43.000 billion in revenue and ¥1.250 billion in operating profit, or revises it to reflect changes in raw material costs, labor costs, North American store openings and investment in the Kyushu plant. The current disclosure does not provide the figures before the first-half forecast revision, so the scale of the upward revision cannot be verified.