Can the 1Q operating loss be reversed in the first half?

Revenue for the April–June 2026 quarter was ¥17,751 million, representing 22.2% progress against the FY2027 full-year revenue forecast of ¥79,840 million. Although this was 2.8 percentage points below the 25.0% of the year elapsed, the revenue result alone cannot be described as a significant shortfall against plan. Operating loss was ¥707 million, ordinary loss was ¥681 million, and the quarterly net loss attributable to owners of the parent was ¥765 million.

Against the full-year operating profit forecast of ¥1,366 million, the company was at a loss of ¥707 million at the end of 1Q and therefore needs to generate a combined ¥2,073 million in operating profit from 2Q onward. If the full-year revenue forecast is simply divided in half, the mechanical H1 revenue benchmark is ¥39,920 million, requiring ¥22,169 million in 2Q alone based on 1Q actual revenue. However, the company has not disclosed H1 revenue or operating profit forecasts, or quarterly seasonality. Accordingly, ¥39,920 million remains only a mechanical benchmark for verification.

The key question is whether the company can secure at least ¥707 million in operating profit in 2Q alone and eliminate the 1Q loss. Even if earnings return to zero in 2Q, additional profit will be needed in 3Q and 4Q to achieve full-year operating profit of ¥1,366 million. Operating profit in 1Q of the previous fiscal year was ¥322 million, so a recovery merely to the prior-year level would not be sufficient to remain on track for the full-year plan.

Operating profit in the previous fiscal year was ¥532 million, and the company expects operating profit of ¥1,366 million this fiscal year, up 156.6% year on year. Although there was no revision to the earnings forecast at 1Q, the company entered the period with a slight revenue decline and an operating loss. At the H1 results, it will be necessary to assess not only whether the full-year forecast is maintained, but also the extent to which higher raw-material and labor costs have been absorbed and store profitability has recovered.