FY2027-H1 broadly on track with the sales plan, but limited scope for further profit upside

First-quarter revenue was ¥13,844 million, up 0.1% year on year, while operating profit was ¥376 million, up 55.3%. The full-year forecasts are ¥57,000 million in revenue and ¥1,500 million in operating profit, making progress at the end of the first quarter approximately 24.3% for revenue and 25.1% for operating profit. On a standalone quarterly basis, both revenue and operating profit were close to the proportion of the year elapsed, so the start of the year was not materially behind schedule.

The company's forecasts for the cumulative second quarter are revenue of ¥28,000 million, operating profit of ¥600 million, ordinary profit of ¥760 million and interim net profit attributable to owners of the parent of ¥500 million. A simple calculation based on the difference from first-quarter results indicates that the standalone second quarter would need to generate approximately ¥14,156 million in revenue, ¥224 million in operating profit, ¥191 million in ordinary profit and ¥106 million in net profit. Although this is a mechanical calculation that does not take into account the prior-year sales trend or the contribution from year-end shopping, exceeding these levels at the next earnings release will be a practical benchmark for measuring progress against the first-half plan.

Cumulative second-quarter results in the previous year were revenue of ¥27,745 million and operating profit of ¥506 million. The current first-half forecast represents approximately 0.9% year-on-year growth in revenue and approximately 18.6% growth in operating profit, indicating a plan focused more on profit improvement than on revenue growth. The increase in first-quarter profit was attributed to the effects of price revisions for certain products and improved profitability, so the next earnings release should be reviewed to determine whether price revisions contributed to cumulative second-quarter operating profit of ¥600 million rather than being merely temporary.

At present, the contributions from higher unit prices and sales volumes have not been disclosed separately on a monetary basis. In the second quarter, it will be important to disclose, where possible, the effects of price revisions, volume changes, and selling and distribution expenses in addition to revenue by product category. Even if revenue reaches ¥28,000 million, if operating profit falls short of ¥600 million, it will be necessary to examine whether gross-profit improvement from price revisions was absorbed by advertising expenses, discounts, raw material costs or other factors.