The 3Q cumulative results appear ahead of plan, but the full-year forecast incorporates an operating loss in 4Q

Revenue for the cumulative 3Q period of the fiscal year ending September 2026 was ¥42,073 million, representing progress of 76.2% against the full-year forecast of ¥55,240 million. This is slightly above the simple time-based progress rate of 75% after nine months. However, the company has consistently explained that 4Q revenue accounts for a lower proportion than revenue in the first three quarters because of seasonality, so it is too early to conclude from revenue alone that the full-year forecast will be substantially exceeded. The 4Q revenue required to achieve the full-year forecast is ¥13,167 million, equivalent to 23.8% of the full-year forecast.

3Q cumulative operating profit was ¥571 million, or 135.0% of the full-year forecast of ¥423 million. However, simply subtracting the full-year forecast implies that the operating profit required in 4Q is negative ¥148 million. This suggests that the full-year forecast may have been set on the assumption of seasonality and expense recognition in 4Q, rather than because cumulative profit through 3Q has been strong. At the final results, it will be necessary to distinguish whether the company actually posted a loss in 4Q or secured a profit above forecast by checking standalone 4Q revenue and operating profit, SG&A expenses and store closure-related costs.

Year on year, 3Q cumulative revenue was down 7.1%, operating profit was down 56.3% and ordinary profit was down 43.9%, so the high progress rate does not indicate profit growth. Although the fashion business continued to be affected by lower revenue, unfavorable weather and store restructuring, the full-year forecast has been maintained. This suggests that the company is factoring in a recovery in the second half or cost controls, but customer numbers, average spend per customer and revenue by product category, which underpin these assumptions, have not been disclosed in sufficient detail.

The 3Q summary also did not disclose the operating margin, and no quarterly consolidated cash flow statement was prepared. Accordingly, as of 3Q it is not possible to determine whether operating profit of ¥571 million translated into substantive cash generation without the accompanying effects of inventory, trade payables and store closure costs. At the next results announcement, it will be necessary to check not only whether full-year operating profit of ¥423 million was achieved, but also the 4Q gross margin, SG&A expenses, operating cash flow, cash balance and whether the assumptions underlying the full-year forecast have changed.