Return to profitability is progressing, but achieving the full-year operating profit forecast of ¥371 million will require a heavy profit contribution in 4Q

Revenue for FY2026 3Q cumulative was ¥12,108 million, operating profit was ¥152 million, ordinary profit was ¥119 million, and quarterly net profit attributable to owners of the parent was ¥139 million. The company's full-year forecasts are revenue of ¥18,000 million, operating profit of ¥371 million, ordinary profit of ¥321 million, and net profit of ¥196 million. Accordingly, revenue progress stands at 67.3%, while operating profit is at 41.0% and ordinary profit at 37.1%, indicating that profit progress is lagging revenue progress.

To achieve the full-year forecasts, the amounts required in 4Q based on 3Q cumulative results are revenue of ¥5,892 million, operating profit of ¥219 million, ordinary profit of ¥202 million, and net profit of ¥57 million. Subtracting first-half revenue of ¥8,250 million from 3Q cumulative revenue of ¥12,108 million gives standalone 3Q revenue of approximately ¥3,858 million, operating profit of approximately ¥30 million, ordinary profit of approximately ¥16 million, and net loss of approximately ¥3 million. The ¥219 million of operating profit required in 4Q is approximately 7 times standalone 3Q operating profit, so a clear improvement in sales volume, pricing or costs will be required, rather than simply maintaining profitability.

The quarterly trend in profits also warrants attention. Cumulative operating profit was ¥219 million in 1Q, but had fallen to ¥122 million on a first-half cumulative basis, implying standalone 2Q operating loss of approximately ¥97 million. Standalone 3Q subsequently returned to a profit of approximately ¥30 million, but the scale of 4Q profit required to achieve the full-year plan has yet to be demonstrated. At the next earnings announcement, it will be important to review not only 4Q revenue but also the standalone quarterly operating margin, the effect of price revisions, and changes in logistics and material costs.

For net profit, the company recorded a gain on the sale of fixed assets of ¥125.169 million in the first half, while also recording store closure losses of ¥5.155 million and a loss on disposal of fixed assets of ¥0.004 million. Thus, looking only at the remaining ¥57 million between net profit of ¥139 million and the full-year forecast of ¥196 million may suggest that the target is achievable, but this is different in nature from the remaining ¥219 million of operating profit. At the full-year results, it will be necessary to separately assess operating earnings power excluding one-off extraordinary gains and losses such as gains on the sale of fixed assets, and whether the full-year forecasts have been revised.