The full-year forecast for the fiscal year ending March 2027 calls for higher revenue and profit, but the key focus is how much profit can be recovered in H1 after the 1Q loss.

Revenue in 1Q of the fiscal year ending March 2027 was ¥3,501 million, representing approximately 28.0% of the newly announced full-year forecast of ¥12,500 million. This was approximately 3 percentage points above the 25% elapsed-period benchmark for three months, making it difficult to say that the revenue start-up was slow. Revenue from direct sales was ¥2,282 million, external sales ¥935 million and TV shopping ¥284 million, representing approximately 25.2%, 37.3% and 29.9%, respectively, of the full-year plan at the end of 1Q.

However, operating loss was ¥260 million, ordinary loss was ¥267 million and net loss was ¥190 million. Against the full-year operating profit forecast of ¥800 million, 1Q progress was negative 32.6%. If H1 is simply assumed to account for 50% of the full-year plan, cumulative 2Q operating profit of ¥400 million would be one benchmark, meaning that standalone 2Q operating profit of approximately ¥660 million would be required given the 1Q loss. As this calculation does not reflect the company’s seasonality, it will be important at the next results announcement to see how the company itself explains H1 seasonality and the concentration of earnings in the second half.

The current earnings presentation includes the full-year forecast and 1Q results, but does not disclose progress against the full-year forecast, the company’s assessment of the overall plan, or numerical assumptions for foreign exchange rates, raw material prices and advertising investment. The increase in 1Q revenue is attributed to new customers, newly introduced stores, OEM deliveries and the success of TV shopping programs, but the factors expected to continue from 2Q onward and the costs to be added have not been quantified.

In the previous fiscal year, the company lowered its full-year operating profit forecast by ¥400 million, from ¥1,050 million to ¥650 million, at the 3Q stage, and reduced its annual dividend forecast from ¥65 to ¥40 per share. Final operating profit for the fiscal year ended March 2026 was ¥685 million, exceeding the revised plan, but for the current ¥800 million forecast it will also be necessary to confirm the build-up of profit, not just revenue, by H1. At the next results announcement, we will track whether the company maintains or revises its full-year forecast and whether it can specifically disclose its second-half profit assumptions, including advertising, logistics and research and development expenses.