Can the full-year plan be maintained after absorbing the first-quarter loss?

Revenue in the first quarter of the fiscal year ending March 2027 was ¥1,239 million, down 2.9% from approximately ¥1,277 million in the same period of the previous year. Operating results deteriorated from an operating loss of approximately ¥128 million to an operating loss of ¥160 million, while the operating margin declined from approximately negative 10.1% to approximately negative 12.9%. The increase in the operating loss was large relative to the decline in revenue, and the immediate challenge is to secure sufficient revenue to absorb fixed costs and classroom operating costs, rather than simply restore revenue.

The company's full-year forecast for the fiscal year ending March 2027 is revenue of ¥5,731 million, operating profit of ¥142 million, ordinary profit of ¥133 million, and net income attributable to owners of the parent of ¥84 million. First-quarter revenue was approximately 21.6% of the full-year forecast, about 3.4 percentage points below the simple elapsed-period benchmark of 25%. To offset the first-quarter loss of ¥160 million and secure full-year operating profit of ¥142 million, approximately ¥302 million in operating profit will be required over the remaining period after the first quarter. This is a mechanical calculation that does not adjust for seasonality, but it provides a benchmark for measuring how much this burden has eased in the first-half results.

Compared with the previous fiscal year, revenue in the fiscal year ended March 2026 was ¥5,621 million and operating profit was ¥77 million. The next-year plan targets a 2.0% increase in revenue and an 83.7% increase in operating profit, but the first quarter began with lower revenue and a wider loss. The company cites the reorganization of some classrooms in the children's education business, a decline in the number of exam-year students in the video-based instruction business, franchise classrooms affected by the closure of 6 classrooms in the previous year, and a decline in sports-business enrolment as factors behind the revenue decline. Accordingly, the first-half review should assess not only whether the full-year forecast has simply been maintained, but also whether these factors have run their course and whether additional classroom reorganizations or cost burdens will arise from the second quarter onward.

The disclosed information includes a full-year forecast, but no first-half forecast or quarterly allocation of revenue and operating profit. Therefore, whether first-half revenue exceeded ¥2,865.5 million should be treated as a reference against half of the full-year forecast, rather than as a comparison with an official interim target. In the next disclosure, it will be important to see whether cumulative first-half revenue, operating results, and the remaining amount required to meet the full-year forecast are disclosed, along with changes in student numbers, classroom numbers, and contract numbers from the second quarter onward that support maintaining the full-year forecast.