Revenue growth accompanied by lower margins, requiring accelerated fourth-quarter profit to meet the full-year plan

For the nine months ended December 2025, revenue was ¥80,730 million, operating profit was ¥8,996 million, ordinary profit was ¥9,014 million, and profit attributable to owners of the parent was ¥6,241 million. Revenue increased 15.6% year on year, operating profit rose 1.2%, and ordinary profit increased 1.4%, while net profit declined 0.7%. Operating profit growth was limited relative to revenue growth, indicating that the increase in revenue has not been fully converted into profit. This will be the first issue to examine in the next full-year results.

Calculating the operating margin, it fell by approximately 1.6 percentage points, from about 12.7% in the year-earlier period to approximately 11.1% for the nine months ended December. The full-year forecast is revenue of ¥110,392 million, operating profit of ¥12,772 million, ordinary profit of ¥12,679 million, and profit attributable to owners of the parent of ¥8,623 million, implying a planned operating margin of approximately 11.6%. Accordingly, the company needs to generate revenue of ¥29,662 million, operating profit of ¥3,776 million and net profit of ¥2,382 million in the fourth quarter alone.

Progress against the full-year plan after the nine months was approximately 73.1% for revenue, 70.4% for operating profit and 72.4% for net profit. Revenue was close to the simple 75% benchmark after nine months, while operating profit was somewhat below it. Achieving fourth-quarter operating profit of ¥3,776 million would require a quarterly operating margin of approximately 12.7%, making an improvement from the 11.1% margin for the nine months a prerequisite.

The third-quarter earnings release did not revise the full-year forecast. The company cited strong sales of higher-priced products, growth in same-store sales, business restructuring in China, new store openings in Taiwan and new stores in the United States as factors behind revenue growth. However, it did not break down the impact of promotional expenses, upfront investment associated with flagship-store launches, store-related costs or the cost ratio to explain why operating profit did not grow as quickly as revenue. In the full-year results, it will be important to determine whether fourth-quarter margin recovery reflects temporary seasonality or the completion of cost burdens.