FY2027 marks a major recovery phase toward the plan to return to profitability

FY2026 consolidated results were revenue of ¥7,302.607 million, an operating loss of ¥166.821 million, an ordinary loss of ¥181.363 million and a net loss attributable to owners of the parent of ¥174.427 million. Revenue fell 3.9% year on year, while the operating loss widened substantially from the ¥5.956 million loss recorded in the previous year. The equity ratio also fell to 17.3% at the end of FY2026, meaning that the FY2027 plan calls for a simultaneous rebuilding of profitability and the financial position, rather than simply higher revenue.

The FY2027 consolidated plan calls for revenue of ¥7,400 million, operating income of ¥10 million and net income attributable to owners of the parent of ¥5 million. Compared with FY2026 actual results, revenue is expected to increase by only ¥97.393 million, or approximately 1.3%, while operating results need to improve by ¥176.821 million, from a loss of ¥166.821 million to income of ¥10 million. Net income also needs to improve by ¥179.427 million, from a loss of ¥174.427 million to income of ¥5 million. The essence of achieving the plan lies not in revenue scale but in improving flower-material prices, labor costs, logistics costs and selling prices.

FY2026-Q1 revenue was ¥1,771.744 million and the operating loss was ¥82.974 million. Even if FY2027-Q1 revenue is in line with the same quarter of the previous year, leaving the operating loss at a similar level would leave extremely little room for recovery to the full-year operating income target of ¥10 million. Conversely, whether the loss can be substantially reduced from the previous year and operating income built up in the core segments will be the first basis for assessing the feasibility of the full-year plan. The ¥1,850 million level is a mechanical benchmark that does not take seasonality into account, so the results should be assessed based not only on revenue but also on segment profit and cost factors.

At the next results announcement, the focus should be not only on whether the plan is maintained or revised, but also on how much of the factors behind the FY2026 loss were resolved in FY2027-Q1. In particular, it will be important to see whether the company provides specific explanations of price pass-through in response to lower selling prices, absorption of higher flower-material and labor costs, control of wholesale logistics costs and a reduction in losses from Other businesses. As no numerical ROE target has been provided for FY2027, it will also be necessary to assess whether the small operating profit target of ¥10 million can lead to improved capital efficiency.