Downward revision to first-half net loss means a second-half recovery is needed to achieve the full-year target of ¥250 million

In the first quarter of the fiscal year ending March 2027, revenue was ¥6.647 billion, operating profit was ¥96 million, ordinary profit was ¥95 million and net income attributable to owners of the parent was ¥67 million. Revenue increased 4.4% year on year, operating profit rose 5.0% and net income increased 5.8%, securing profitability on a quarterly basis. However, first-quarter progress against the full-year net income forecast of ¥250 million was 26.8%, remaining close to a simple even-quarter pace.

Subsequently, the FY2027-H1 forecast for net income was significantly revised downward, from a ¥40 million profit to a ¥92 million loss. The factors cited by the company were actual revenue falling below plan, lower operating profit, a shortfall in equity-method investment income, and impairment losses recognized for closed stores. Based on the information available for this review, the revised first-half revenue and operating profit figures, as well as the number and amount of stores subject to impairment, have not been disclosed in sufficient detail.

If the full-year net income forecast of ¥250 million is maintained, a first-half net loss of ¥92 million would require net income of ¥342 million in the second half. This is equivalent to 136.8% of the full-year forecast and represents a plan to concentrate in the second half enough profit not only to offset the first-half loss but also to exceed the annual target. In light of first-quarter net income of ¥67 million, a key point to confirm will be which businesses, seasonal factors and non-recurring gains or losses are expected to generate the additional second-half profit.

At the next earnings announcement, we will confirm the first-half actual or revised forecasts for revenue, operating profit, ordinary profit and net income separately from the amount still required to meet the full-year forecasts. The main issue is whether the company will maintain its full-year forecasts of ¥28.0 billion in revenue, ¥500 million in operating profit, ¥550 million in ordinary profit and ¥250 million in net income, or revise its full-year plan in response to the first-half shortfall.