Can the FY2027 return to profitability be demonstrated in Q1?

FY2026 revenue was ¥1,882 million, up just 0.6% year on year, but the operating loss narrowed by ¥31 million, from approximately ¥139 million in the previous fiscal year to approximately ¥108 million. The ordinary loss also narrowed from approximately ¥136 million to approximately ¥107 million, while the net loss narrowed from approximately ¥218 million to approximately ¥189 million. However, operating earnings remained negative, and the operating margin remained at negative 5.8%. FY2026-Q1 revenue was ¥473 million and the operating loss was ¥27 million, so the first point to confirm next time is whether both revenue and operating earnings improve year on year.

For FY2027, the company forecasts revenue of ¥2,000 million, up 6.3% year on year, operating profit of ¥11 million, ordinary profit of ¥7 million and net profit of ¥3 million. The forecast assumes a swing in operating profit from a ¥108 million loss in FY2026 to an ¥11 million profit, representing an improvement of approximately ¥119 million on a simple calculation. Following operating losses of approximately ¥139 million in FY2025 and approximately ¥108 million in FY2026, the company expects to achieve full-year profitability for the first time in FY2027. However, it has not disclosed a specific quarterly earnings forecast for Q1 or the quarterly allocation of profit in relation to the full-year forecast.

Accordingly, the key issue for FY2027-Q1 is not simply whether revenue increases, but whether higher gross profit can absorb increases in selling, general and administrative expenses. Whether the operating loss can be kept below the ¥27 million recorded in the year-earlier quarter, or whether the company can turn an operating profit, will be the first benchmark for assessing the feasibility of the ¥11 million full-year operating profit forecast. The results should also be checked for additional quantitative disclosure of indicators linking operations to profitability, such as customer numbers, average spend per customer, the cost ratio, personnel expenses and the break-even point by store.