Revenue is up, but costs are front-loaded; the path to full-year profitability remains long

FY2027-Q1 revenue was ¥2,825 million, up 8.6% year on year. On the earnings side, however, the company posted an operating loss of ¥101 million, an ordinary loss of ¥113 million and a quarterly net loss attributable to owners of the parent of ¥78 million, meaning that higher revenue did not translate directly into profit. FY2026 had reached profitability, with operating profit of ¥250 million, ordinary profit of ¥198 million and net profit of ¥78 million, so this quarter did not confirm that full-year profitability had become established; the important point is that the year began in the red again.

The company’s FY2027 full-year forecast is revenue of ¥12,549 million, operating profit of ¥414 million, ordinary profit of ¥367 million and net profit of ¥229 million. Q1 revenue has reached 22.5% of the full-year forecast, close to the 25% quarterly benchmark, but operating profit cannot be assessed using a normal progress rate because Q1 operating profit was negative. Starting from the Q1 operating loss of ¥101 million, achieving full-year operating profit of ¥414 million requires total operating profit of ¥515 million over the remaining 3 quarters. For ordinary profit, converting the Q1 loss of ¥113 million into full-year profit of ¥367 million requires ordinary profit of ¥480 million over the remaining period.

The company attributed the revenue increase to a higher number of new restaurant openings and the leisure segment’s launch of operations at THE BOTANICAL RESORT “Rinon.” At the same time, costs associated with new openings and the operation of stores and facilities increased, and revenue of ¥2,825 million in Q1 was not sufficient to absorb these fixed and front-loaded costs. All 3 segments—restaurants, bridal and leisure—were operating at a loss, indicating that the consolidated earnings decline was driven less by a temporary deterioration in a single business than by the cost burden following openings and launches.

The company explained that demand for year-end parties in the restaurant business and the bridal segment’s peak season are concentrated in the third quarter, creating seasonality that tends to lift revenue and ordinary profit. The Q1 loss therefore cannot by itself invalidate the full-year forecast, but the key issues for the next results announcement will be how much the operating loss is reduced in FY2027-H1 and whether profit can be accumulated without relying on the third-quarter peak season. No quarterly cash flow statement was prepared for Q1, and operating cash flow, capital expenditure and the amount of risk incorporated into the full-year forecast were not disclosed. The company’s ability to generate the funds underpinning an earnings recovery therefore needs to be confirmed at the interim stage.