Revenue is trending below plan, while profit is ahead of schedule

Cumulative revenue for the first 3 quarters was ¥11,888 million, operating profit was ¥267 million, ordinary profit was ¥232 million and net profit was ¥233 million. Progress against the full-year forecasts was 69.8% for revenue, 75.7% for operating profit, 71.5% for ordinary profit and 102.8% for net profit. Revenue alone was 5.2 percentage points below the standard 75% level after 9 months, and the company itself described achievement of the full-year plan as difficult.

To achieve the full-year revenue forecast of ¥17,035 million, Q4 revenue of ¥5,147 million is required. This represents 30.2% of the full-year forecast, so the company needs to accelerate revenue through higher order intake, more orders or higher average order values, rather than simply building operating profit. The company needs only ¥85 million of operating profit in Q4 to meet the full-year forecast of ¥352 million, implying a required operating margin of approximately 1.7% on a simple calculation. The hurdle is lower on the profit side than on the revenue side, but it remains necessary to determine whether the revenue shortfall will be absorbed solely through cost controls.

The fact that net profit progress of 102.8% exceeds operating profit progress of 75.7% reflects the impact of extraordinary gains and losses. In the cumulative first 3 quarters, extraordinary gains of ¥100.885 million and extraordinary losses of ¥20.188 million were recorded. The lead in net profit therefore cannot be equated with an improvement in operating profit. If advertising and promotional expenses, showroom-related costs and other spending are concentrated in Q4, it will also be important to assess how much of the net profit lead remains.

At the next results announcement, we will first check whether Q4 revenue reached ¥5,147 million and whether operating profit increased by at least ¥85 million. We then need to distinguish whether the revenue shortfall was offset by higher average order values or repeat purchases, or whether profit was protected through controls on advertising, logistics and personnel expenses. Whether the company finishes the year with its full-year forecasts unchanged or revises its revenue or profit forecasts will also affect the assessment of FY2026.