Operating loss narrowed, but improvement must take hold in the first half for FY2027 to turn profitable

First-quarter revenue in FY2027 was ¥693.027 million, up 1.7% from ¥681.260 million in the same period last year. Operating loss was ¥25.751 million, narrowing by ¥41.850 million from ¥67.601 million a year earlier. With revenue not showing significant growth, operating results improved, suggesting that the results were driven less by a simple recovery in demand than by revisions to promotional spending, SG&A expenses and logistics operations.

The company’s presentation breaks down the year-on-year improvement in operating results into positive factors of ¥8.6 million from the revenue increase, ¥49.8 million from the higher gross margin and ¥9.6 million from fixed-cost reductions, against negative factors of ¥12.5 million in revenue-linked costs, ¥8.6 million in upfront investment and ¥5.0 million in other SG&A expenses. Since most of the improvement depends on the higher gross margin, the next results announcement should clarify whether the margin improvement reflects changes in product mix and sales channels or a one-off sales mix effect.

By business, first-quarter EC revenue was ¥545.197 million, representing progress of 26.0% against the full-year forecast of ¥2,100 million. Event revenue was ¥141.597 million, or 18.9% of the ¥750 million full-year forecast, while crypto-asset revenue was ¥6.234 million, or 10.4% of the ¥60 million full-year forecast. EC was the only business to exceed the 23.8% progress rate for consolidated revenue as a whole, making it important at the interim results stage to confirm whether events and crypto assets are progressing as planned, with the second half weighted more heavily.

Operating loss remained in the first quarter, while the full-year operating profit forecast was maintained at ¥0 million. For the first half, revenue of ¥1,455 million, EC revenue of ¥1,050 million, event revenue of ¥375 million and crypto-asset revenue of ¥30 million would each represent a simple 50% progression against the full-year forecasts. In practice, linear progress is not appropriate because the event business is affected by the year-end shopping season and event schedules, but the key issues are whether the improvement in operating results is maintained through the cumulative second quarter and whether the company can disclose the amount of SG&A reductions together with changes in the gross margin.