The key question is whether continued sales growth will be accompanied by an improvement in operating results.

In the first quarter from April through June 2026, consolidated revenue rose to ¥4,399 million, up ¥89 million, or 2.1%, from ¥4,310 million in the same period of the prior year. However, operating results deteriorated by ¥85 million, from a ¥522 million loss in the prior-year period to a ¥607 million loss. On a simple calculation, the operating margin fell 1.7 percentage points, from approximately -12.1% in the prior-year first quarter to approximately -13.8% in the current quarter, indicating that sales growth has not translated into improved profitability.

The company cited sluggish sales volumes, reflecting growing consumer concerns about household finances and a stronger preference for saving, as well as higher procurement costs caused by the weaker yen, higher raw material and fuel prices, logistics costs, and labor costs as factors behind the deterioration in earnings. Although prices for some products were revised, profitability had not improved as of the first quarter. The company has not disclosed a quantitative breakdown showing how many millions of yen each factor, including prices, volumes, product mix, procurement costs, logistics costs, and labor costs, reduced operating results.

At the next second-quarter earnings announcement, the key issue will be not only whether first-half revenue exceeds ¥10,173 million in the prior-year period, but also whether operating results improve from the prior-year first-half loss of ¥356 million. Simply doubling the first-quarter operating loss of ¥607 million to estimate the full year would ignore seasonality and would not be appropriate. It will be necessary to assess whether sales volumes recovered in the second quarter alone, whether the penetration of price revisions increased, and whether cost inflation continued.

In particular, if the combination of higher year-on-year revenue and a wider operating loss continues through the first half, the likelihood will increase that volume declines, discounts, and an adverse product mix are outweighing the benefits of price revisions. The earnings release should be reviewed for the operating margin, the scope of products subject to price revisions, year-on-year sales volumes, and changes in major costs, to determine whether the review of the earnings structure is beginning to show up in results.