Focus is on execution of the FY2027 plan for higher revenue and substantial operating profit growth

Revenue for FY2026 was ¥12,877 million, down 11.0% from ¥14,502 million in the previous fiscal year. Operating profit, however, rose 29.0% from ¥440 million to ¥567 million, while ordinary profit also increased from ¥329 million to ¥436 million. The most recent results show that the shift in management focus from pursuing sales scale to emphasizing brand strength and profitability enabled operating profit to grow despite lower revenue.

The company's full-year forecasts for FY2027 are ¥14,100 million in revenue, ¥960 million in operating profit, ¥840 million in ordinary profit and ¥710 million in net income attributable to owners of the parent. Compared with the FY2026 results, revenue is expected to increase 9.5%, operating profit 69.3% and ordinary profit 92.7%, while net income is projected to fall 13.2% from ¥818 million to ¥710 million. The plan assumes not only a recovery in revenue but also an increase in the operating margin from approximately 4.4% in FY2026 to approximately 6.8%. At the next earnings announcement, the key issue will be whether higher revenue is accompanied by improvements in gross margin and SG&A efficiency, rather than simply whether revenue has increased.

FY2026 segment results were ¥5,874 million in revenue and ¥618 million in operating profit for the manufacturing and wholesale business for home-related lifestyle products, ¥6,848 million in revenue and ¥1,226 million in operating profit for the retail business for home-related lifestyle products, and ¥154 million in revenue and ¥154 million in operating profit for the design business. Wholesale and retail together account for most of revenue. Achieving FY2027 operating profit of ¥960 million will therefore require not only high-margin transactions such as the design business, but also a recovery in revenue and continued margin retention in the two core businesses.

FY2026-Q1, the comparison period, recorded revenue of ¥3,455 million, operating profit of ¥34 million, ordinary profit of ¥48 million and net income attributable to owners of the parent of ¥170 million. In FY2027-Q1, the focus will be not only on exceeding the prior-year operating profit of ¥34 million, which was low, but also on how much of the full-year operating profit forecast of ¥960 million is secured in the first quarter. Although quarterly seasonality must be taken into account, whether the company discloses full-year forecast progress rates for revenue and operating profit for the first time will also affect how verifiable the plan is.