How far can higher wedding spend per event offset weak event volumes?

In the latest interim period, company-operated venues hosted 4,505 weddings, 22 below the company’s first-half outlook of 4,527. The company attributed the decline in events to the underperformance of the consolidation of 4 company-operated venues and 6 banquet facilities in the previous year, as well as lower-than-expected streamlining of advertising volume aimed at improving advertising investment efficiency. Meanwhile, the domestic wedding business generated revenue of ¥23,191 million and operating profit of ¥1,647 million, for an operating margin of approximately 7.1%.

Higher spend offset the weakness in volume. Average wedding spend was ¥4.276 million, up ¥193,000 year on year, while average attendance was 61.6 guests, up 1.3 guests. The increase in spend reflected both higher-value food and beverages, floral arrangements and after-wedding bouquets, as well as the increase in attendance. Accordingly, at the next results announcement, it will be important to explain not only whether spend increased further, but also how much of the increase was attributable to higher average attendance and how much to product mix and sales promotion.

Historically, weddings at company-operated venues increased from 4,187 in the previous interim period to 4,505, but still fell 22 short of the company plan. Even if event volumes increase, higher upfront costs such as advertising and personnel expenses could rise at the same time, meaning that higher revenue will not necessarily translate directly into an improved operating margin. In particular, the disclosed income statement does not show whether the domestic wedding business’s ¥1,647 million operating profit depended more heavily on average wedding spend of ¥4.276 million or on the 4,505 events held.

In FY2026-Q3, we would like to see cumulative events and the gap to the outlook, average wedding spend and average attendance presented in the same table. We will also track whether the company discloses the number of weddings handled at company-operated venues versus outsourced operations and consulting, the conversion rate from advertising inquiries to contracts, and changes in the cost of sales and SG&A ratios accompanying the increase in wedding spend. If the shortfall in events narrows and the company maintains average spend of at least ¥4.276 million while keeping the operating margin around 7.1%, the reproducibility of an earnings model based more on spend and product mix than on volume will improve.