Revenue growth but a wider 1Q loss: FY2027-H1 is the turning point for achieving the full-year profit plan

FY2027-Q1 revenue was ¥3,520 million, up 2.1% year on year. However, operating results were a ¥69 million loss, ordinary results were an ¥84 million loss, and quarterly net results attributable to owners of the parent were a ¥93 million loss. Despite the increase in revenue, the operating loss widened by ¥11 million from ¥58 million in the same quarter of the previous year. The central issue in these results is that revenue growth has not translated into profit.

FY2026 full-year results were revenue of ¥14,724 million, operating profit of ¥411 million, ordinary profit of ¥360 million and net profit attributable to owners of the parent of ¥207 million. In contrast, the FY2027 full-year forecasts are revenue of ¥15,000 million, operating profit of ¥312 million, ordinary profit of ¥250 million and net profit of ¥128 million. Revenue is expected to rise 1.9%, while operating profit and net profit are projected to decline 24.2% and 38.4%, respectively. At the 1Q stage, revenue progress toward the full-year forecast was only 23.5%, while operating profit was tracking below the full-year plan.

However, caution is required when assessing revenue and profit by simply dividing them evenly across quarters. The company has previously explained that revenue is seasonal and concentrated in the third quarter because of exhibitions and events, so it is too early to judge whether the full-year plan will be missed based solely on the 1Q loss. If equal allocation is used mechanically as a simple benchmark, revenue of approximately ¥7,500 million and operating profit of approximately ¥156 million would be required by H1. These are reference figures for measuring H1 progress, not company guidance.

The main reason for 1Q revenue growth was the contribution from 薬師スタジオ, ニューヨークジョーエクスチェンジ and アークネット, which joined the group in the previous fiscal year and were consolidated from the start of the period. On the profit side, the New Value segment generated a profit of ¥15 million, while the Core Value segment recorded a loss of ¥84 million. In addition to the reversal of the temporary profit boost in the kimono and jewelry business in the previous year, higher goodwill amortization and other M&A-related costs weighed on profit.

In FY2027-H1, it will be necessary to monitor not only revenue progress but also the return to operating profitability, the reduction of the Core Value loss and the accumulation of profit in New Value. It will also be important to see whether the company discloses which businesses will generate how much profit during the demand season in the second half to support the ¥312 million full-year operating profit forecast, and how much of the reversal of one-off profit and the increase in goodwill amortization has been factored into the plan.