Revenue growth accompanied by margin contraction, making the sustainability of cost pass-through the focus for FY2027 H1

In the first quarter of the fiscal year ending March 2027, revenue was ¥5,231 million, up 8.6% year on year, while operating profit was ¥422 million, down 23.8%, ordinary profit was ¥440 million, down 23.8%, and net profit attributable to owners of the parent was ¥268 million, down 30.6%. Compared with revenue of ¥4,816 million and operating profit of ¥554 million in the same quarter of the previous year, revenue increased but operating profit declined by ¥132 million. The operating margin fell by approximately 3.4 percentage points, from approximately 11.5% in the same quarter of the previous year to approximately 8.1%.

The company cites inbound demand driven by the weak yen, higher unit prices following price revisions, and demand generated by limited-edition products and discount campaigns as factors behind the revenue increase. It explains that profits were reduced by soaring raw-material and utility costs, the persistence of labor shortages, and frugality among domestic consumers. However, no monetary bridge has been disclosed separating the revenue increase from price revisions from the profit reduction attributable to raw materials, utilities and personnel expenses. In H1, we will examine how much of the revenue increase came from price and volume factors, respectively, and the extent to which cost increases were absorbed.

The full-year forecast for the fiscal year ending March 2027 is revenue of ¥22,775 million, operating profit of ¥1,953 million, ordinary profit of ¥1,986 million and net profit of ¥1,276 million. As of Q1, progress was approximately 23.0% for revenue and approximately 21.6% for operating profit, and the company has not revised its full-year forecast. On a simple evenly distributed half-year basis, H1 revenue would be ¥11,387.5 million and operating profit would be ¥976.5 million. However, because no quantitative explanation of seasonality has been provided, these figures should be treated as comparative benchmarks rather than performance thresholds.

In H1, the key question will be whether the operating margin remains in the approximately 8% range despite continued revenue growth, or approaches the 10.2% reported for the fiscal year ended March 2026 through price revisions and an improved business mix. Recent company information news indicates that the next earnings announcement is scheduled for 13 November 2026. At that time, we will examine not only the margin level but also the monetary disclosure of cost factors and the reasons for maintaining the full-year forecast.