FY2027: The focus is shifting from accelerating revenue growth to reaching ¥5,000 million in operating profit and assessing the special factors affecting net income

FY2025 revenue was ¥68,768 million and operating profit was ¥3,164 million, compared with revenue of ¥81,807 million and operating profit of ¥4,085 million in FY2026. Year on year, revenue increased 19.0% and operating profit increased 29.1%, while the operating margin rose from approximately 4.6% to approximately 5.0%. Accordingly, in FY2027-Q1, the key issue will be whether the higher margin achieved in FY2026 can be maintained, rather than simply whether revenue continues to grow.

The company forecasts FY2027 revenue of ¥90,000 million, operating profit of ¥5,000 million and ordinary profit of ¥5,000 million. Based on FY2026 results, the forecast growth rates are approximately 10.0% for revenue and approximately 22.4% for operating profit, assuming profit growth will outpace revenue growth. On a simple equal-quarter allocation, the reference levels for FY2027-Q1 would be revenue of ¥22,500 million and operating profit of ¥1,250 million. However, because of seasonality from e-commerce and store events, these should be treated as mechanical benchmarks for measuring progress, not quarterly targets under the company plan.

The picture for net income is substantially different from that for operating profit. Net income attributable to owners of the parent was ¥3,011 million in FY2026, while the FY2027 forecast is ¥1,400 million, representing an expected decline of approximately 53.5%. The company has disclosed that the main reason is the planned recognition in FY2027 of a ¥3,036 million loss on the cancellation of treasury stock acquisition rights in connection with the acquisition and cancellation of the 24th Series of Stock Acquisition Rights. In FY2027-Q1, it will be necessary to determine whether this loss was recognized as an extraordinary loss and, if not, in which quarter it will be recognized, separately from operating profit and operating cash flow.

For the FY2027-Q1 results, we will review not only actual revenue and operating profit, but also progress against the full-year forecasts of ¥90,000 million and ¥5,000 million, whether the full-year forecasts are maintained or revised, and how the ¥2 annual dividend is treated. Net income alone may suggest a decline, so a key consideration in assessing earnings quality will be whether the company simultaneously discloses the one-off, non-operating nature of the cancellation loss and the impact of share repurchases on the number of shares outstanding and earnings per share.