Profit progress is significantly lagging sales progress for the first half, making a sharp recovery in the second half necessary to meet the full-year forecast

Sales in the first half of FY2026 reached ¥11,667 million, representing approximately 47.6% of the full-year forecast of ¥24,500 million. First-half operating profit was only ¥45 million, representing approximately 6.1% of the full-year operating profit forecast of ¥750 million. Ordinary profit or loss was a ¥24 million loss, while interim net profit or loss attributable to owners of the parent was a ¥197 million loss, indicating that profit accumulation remains weak relative to the scale of sales.

To achieve the full-year forecast, the company will need to generate approximately ¥12,833 million in sales and approximately ¥704 million in operating profit in the second half. Sales would reach the target with second-half sales roughly in line with the first half, but operating profit must increase substantially from the first-half figure of ¥45 million. Accordingly, in FY2026-Q3, it will be necessary to assess not simply whether sales increased, but whether operating profit remained positive and how far the extremely low first-half operating margin of approximately 0.39% recovered.

In FY2026 Q1, sales were ¥5,790 million, against an operating loss of ¥15 million, an ordinary loss of ¥56 million and a quarterly net loss attributable to owners of the parent of ¥135 million. Although operating profit improved to ¥45 million on a cumulative basis through Q2, cumulative first-half profit remained well below the full-year plan. The company has not revised its forecasts and, despite the expansion of the consolidated scope, new store openings in Japan and overseas, new products and brand conversions during the first half, it is maintaining a plan premised on a recovery in the second half.

At the next earnings announcement, investors should check cumulative Q3 sales, operating profit, ordinary profit and profit attributable to owners of the parent, as well as whether the full-year forecast has been revised, the expected effect of second-half store openings, the effect of price revisions and the contribution from acquired brands. In particular, the extent to which operating profit increased from the first-half result of ¥45 million, and whether the ordinary loss and net loss are moving toward elimination, will be central to assessing the achievability of the full-year forecast.