Can the ¥682 million FY2027 June-year operating profit plan demonstrate that profitability has taken hold in Q1?

In FY2026, earnings improved as the year progressed. First-quarter revenue was ¥3,209 million, with an operating loss of ¥87 million, an ordinary loss of ¥103 million and a quarterly net loss attributable to owners of the parent of ¥125 million. On a cumulative basis through the second quarter, revenue was ¥6,662 million, with an operating loss of ¥130 million and an ordinary loss of ¥157 million, so the company remained in the red. By the cumulative third quarter, however, it had recovered to revenue of ¥10,548 million, operating profit of ¥120 million and ordinary income of ¥25 million. Full-year revenue was ¥14,041 million and operating profit was ¥106 million, although operating profit in the fourth quarter alone fell ¥14 million from the cumulative third-quarter level, meaning that the improvement did not progress linearly throughout the year.

The company's FY2027 forecast is revenue of ¥14,452 million, operating profit of ¥682 million, ordinary income of ¥585 million and net income attributable to owners of the parent of ¥503 million. While revenue is expected to increase by only 2.9%, the plan calls for operating profit to rise 543.3% from the previous year's ¥106 million, implying a simple-calculation increase in the operating margin from 0.8% in FY2026 to approximately 4.7%. The plan therefore appears to assume continued benefits from pricing adjustments, a review of discount programs and fixed-cost efficiencies following the store restructuring, rather than merely a recovery in demand.

In FY2027-Q1, the first test of the full-year ¥682 million plan will be whether the company can move into the black from the FY2026-Q1 operating loss of ¥87 million. The company has not provided a standalone quarterly operating profit forecast or a quantitative Q1 progress rate against its full-year forecast. In addition to revenue, it will therefore be necessary to monitor gross margin, SG&A expenses, fixed costs after the store restructuring and segment profit. Although some of the factors behind the FY2026 operating profit improvement were quantified, the company has not disclosed the quarterly allocation of profit or the assumptions required to reach ¥682 million in its FY2027 forecast.