Operating profit reached 42.4% of the full-year plan in Q1. Can strong profit progress be maintained through H1?

Q1 revenue was ¥54,554 million, operating profit was ¥5,321 million, ordinary profit was ¥5,471 million and net profit attributable to owners of the parent was ¥3,768 million. The full-year forecasts are revenue of ¥205,000 million, operating profit of ¥12,540 million, ordinary profit of ¥13,000 million and net profit of ¥8,377 million, putting progress at 26.6% for revenue and 42.4% for operating profit. Q1 operating margin, calculated as operating profit divided by revenue, was approximately 9.8%, making the fact that profit is leading revenue the key point to monitor.

However, no year-on-year comparison was disclosed for Q1 of the fiscal year ending February 2027 because consolidated financial statements had not been prepared for the previous-year period. Accordingly, the 42.4% profit progress should not be read as an improvement from the previous year, but as an indicator of the company’s current position against its full-year plan. The company cited 12 new store openings and 10 closures, an increase in new online-store members, and strong sales of spring and summer apparel, powdered milk, disposable diapers, hygiene products and toys as performance drivers, but did not disclose the operating profit contribution of each factor.

In FY2027-H1, it will be necessary to determine whether the lead in operating profit reflects temporary seasonality or restrained markdowns, rather than simply whether revenue reaches a level equivalent to a normal first-half run rate. It will be particularly important to see whether cumulative H1 operating profit, operating margin, gross profit and selling, general and administrative expenses are disclosed together. Even if the full-year operating profit forecast of ¥12,540 million remains unchanged, we would like to confirm with the company whether profit progress will accelerate further in H1 and whether store-opening costs and autumn/winter inventory burdens will be concentrated in H2.