Can the strong FY2027 year ending March 2027 first-quarter performance support the full-year earnings growth plan beyond the first half?

In the first quarter of the fiscal year ending March 2027, net sales were ¥61,261 million, operating income was ¥8,116 million, ordinary income was ¥8,034 million, and net income attributable to owners of the parent was ¥5,467 million. Year on year, net sales increased 16.0%, operating income 78.4%, ordinary income 78.4%, and net income 79.1%, representing substantial earnings growth across the main profit lines. Operating margin, calculated from net sales and operating income, was approximately 13.2%, above the 11.1% recorded for the full fiscal year ended March 2026.

The full-year forecasts are ¥255,000 million in net sales, ¥31,000 million in operating income, ¥30,500 million in ordinary income, and ¥21,000 million in net income, and had not been changed as of the first quarter. Net sales progress was 24.0% and operating income progress was 26.2%, with earnings progress approximately 2.2 percentage points ahead of sales progress. However, revenue recognition from membership sales and hotel openings fluctuates significantly by quarter, so it would not be appropriate to judge full-year achievement based solely on time-proportional benchmarks of 25% and 50%.

The drivers of first-quarter earnings growth included membership sales, increases in hotel and medical membership, the operation of hotels opened in the previous fiscal year, and price revisions. Operating income was ¥1,093 million in the Hotel and Restaurant Operations and Other segment, ¥2,218 million in the Medical segment, and ¥6,920 million in the Membership segment, with multiple segments contributing to earnings growth. The company did not prepare a cash flow statement for the first quarter, however, so operating cash flow and the cash balance cannot be corroborated.

For FY2027-H1, a mechanical benchmark will be whether net sales reach at least approximately ¥127,500 million and operating income approximately ¥15,500 million. However, taking into account the timing of revenue recognition for the real estate component of membership rights and hotel seasonality, it will be necessary to review not only sales levels but also operating margin, segment profit, and progress in membership contracts. The next valuation point will be whether the full-year forecasts are maintained in the first-half results or revised to reflect better-than-expected actual performance.