Will first-half revenue and profit growth, and the full-year upward revision, continue into the third quarter?

First-half revenue was ¥242.457 billion, operating profit was ¥16.857 billion, interim profit before tax was ¥14.654 billion and interim profit attributable to owners of the parent was ¥10.181 billion. Year on year, revenue rose 9.7%, operating profit 20.9%, profit before tax 20.0% and profit attributable to owners of the parent 29.2%, with both revenue and profit finishing higher. The operating margin was approximately 7.0% in the first half, improving from approximately 6.3% in the same period a year earlier.

The full-year forecast was raised at the first-half results from the first-quarter forecasts of ¥490.0 billion in revenue, ¥33.5 billion in operating profit, ¥29.7 billion in profit before tax and ¥19.5 billion in profit attributable to owners of the parent to ¥500.0 billion, ¥35.0 billion, ¥30.0 billion and ¥20.5 billion, respectively. The company attributed the upward revision to strong first-half results and recent business progress, but the third-quarter materials will need to clarify the extent to which the forecast depends on sustained second-half demand, same-store performance and the benefits of new openings.

Compared mechanically with the revised full-year forecasts, first-half progress was approximately 48.5% for revenue, 48.2% for operating profit, 48.8% for profit before tax and 49.7% for profit attributable to owners of the parent. At the half-year point, revenue and operating profit were close to halfway toward the full-year forecasts, but this alone is not enough to assess whether the forecasts will be achieved. For the cumulative third quarter, ¥375.0 billion in revenue, ¥26.25 billion in operating profit, ¥22.5 billion in profit before tax and ¥15.375 billion in profit attributable to owners of the parent will be used as mechanical 75% benchmarks, with seasonality taken into account.

The earnings presentation focused on cumulative second-quarter results and did not disclose standalone operating profit or margins for the three months of the second quarter. In the third quarter, it will be important to see whether the company additionally discloses standalone results for July to September, changes in margins from the first half and the assumptions for the remaining period underlying the full-year forecast. The first assessment point for the next results will be whether the full-year forecast is maintained after the upward revision or revised again.