Revenue is rising, but losses continue, making a return to profitability the key focus for FY2027-H1

Revenue for 1Q of FY2027 was ¥963 million, an increase of ¥176 million, or 22.4%, from ¥787 million in the same period of the previous year. However, the operating result deteriorated by ¥10 million, from an operating loss of ¥45 million in the same period of the previous year to an operating loss of ¥55 million, while the ordinary loss widened from ¥20 million to ¥38 million. The quarterly net loss attributable to owners of the parent increased from ¥15 million to ¥39 million, an increase of ¥24 million.

The ratio of operating income to revenue was approximately negative 5.7% in 1Q, compared with approximately negative 5.7% in the same period of the previous year, indicating that the margin effectively did not improve despite the increase in revenue. The company attributes this to the weaker yen, persistently high logistics costs, and higher materials and logistics costs for domestically produced flowers, but has not disclosed a quantitative breakdown of where the additional revenue was absorbed, such as product costs, logistics costs and personnel expenses.

The group also operates in a single wholesale flower segment, and no breakdown has been provided for the ¥963 million of 1Q revenue or the ¥55 million operating loss by product group, sales channel, existing business or newly consolidated subsidiary. It is therefore not possible at this stage to determine whether the increase in revenue was driven by higher volumes or by pricing and market conditions, or whether the wider loss was a temporary seasonal factor or reflected continuing cost increases.

In FY2027-H1, it will be necessary to assess not only whether cumulative operating income reaches ¥0 million or more, but also year-on-year revenue growth, the operating margin, the ordinary result and the net result. In particular, because an operating loss of ¥55 million was recorded in 1Q, whether the company can become profitable in 2Q alone or whether a loss remains on an H1 cumulative basis will be a direct issue in assessing the achievability of the full-year operating income forecast of ¥125 million.