FY2027 fiscal year ending March 2027: revenue rose in Q1, but profit progress lagged

Revenue for the first quarter of the fiscal year ending March 2027 was ¥22,061 million, up 2.9% year on year. However, operating profit was ¥589 million, ordinary profit was ¥563 million, and profit attributable to owners of the parent was ¥227 million, down 42.2%, 41.8% and 45.6%, respectively, year on year. Revenue growth failed to translate into profit growth, clearly resulting in higher revenue but lower earnings.

By segment, the restaurant business generated revenue of ¥14,717.502 million and operating profit of ¥776.957 million. Revenue increased 1.5% year on year, but operating profit declined 14.6%. The café business generated revenue of ¥7,239.561 million and operating profit of ¥513.838 million. Revenue rose 4.3%, while operating profit fell 27.5%. Since revenue increased in both segments, the next results should be assessed to determine whether higher customer numbers and average spend are offsetting raw-material, labor and energy costs.

The full-year forecasts remain unchanged at ¥93,000 million for revenue, ¥5,300 million for operating profit, ¥5,100 million for ordinary profit and ¥2,900 million for net profit. First-quarter progress was approximately 23.7% for revenue, 11.1% for operating profit and 7.8% for net profit. Compared with the simple quarterly elapsed-period benchmark of 25%, revenue was broadly on plan, while profits were significantly behind. The operating margin was approximately 2.7% in Q1, down around 2.1 percentage points from approximately 4.8% in the same period of the previous year.

The company explained that higher procurement costs, labor costs and energy prices created a challenging operating environment, and that it had pursued price pass-through and menu initiatives. However, the Q1 financial summary does not break down the increases in raw-material costs, labor costs, electricity charges and logistics costs by factor. Gross margin and segment labor-cost ratios have also not been disclosed, so the reasons for the decline in operating profit to ¥589 million cannot yet be verified on an amount basis.

At the next interim results, attention should focus not only on how close revenue comes to ¥46,500 million, or 50% of the full-year forecast, but also on whether operating profit can reach ¥2,650 million. Segment profit, the contribution from price revisions, customer numbers and average spend, year-on-year changes in raw-material and labor costs, and whether the full-year forecast is revised at the interim stage will provide the basis for assessing profit recovery in the second half.