Profit progress relative to the pace of revenue growth is the focus in FY2027-H1

Revenue in the first quarter of FY2027 ending February 2027 was ¥159,614 million, operating profit was ¥4,356 million, ordinary profit was ¥3,907 million and quarterly net profit attributable to owners of the parent was ¥2,673 million. Progress against the full-year forecasts was 25.4% for revenue, 18.2% for operating profit, 17.4% for ordinary profit and 18.8% for net profit. Revenue and each profit measure exceeded the year-earlier period in the first quarter, but profit progress was lower than revenue progress, making it important to determine whether margins can be raised in the first half.

By segment, Japan generated revenue of ¥156,898 million and segment profit of ¥4,396 million, up 14.9% and 15.1%, respectively, year on year. Other generated revenue of ¥2,716 million and a segment loss of ¥32 million. Revenue rose 61.9% year on year, but the segment remained loss-making. In the first half, it will be necessary to assess whether revenue and profit growth in Japan continues, whether losses in the Other businesses narrow, and the impact of intersegment eliminations and other factors that accounts for the difference from consolidated operating profit of ¥4,356 million.

In the previous fiscal year, FY2026 ending February 2026, revenue was ¥562,774 million, operating profit was ¥20,209 million, ordinary profit was ¥18,608 million and net profit was ¥11,914 million. The current full-year forecasts are revenue of ¥629,000 million, operating profit of ¥24,000 million, ordinary profit of ¥22,400 million and net profit of ¥14,200 million, implying an 18.8% year-on-year increase in operating profit. With first-quarter operating profit progress at only 18.2%, whether operating profit can reach ¥12,000 million in the first half will indicate the company’s ability to absorb inventory disposal costs and SG&A expenses, rather than simply its ability to increase unit sales.

The first-quarter materials contained no revision to the full-year forecasts, and the outlook for higher revenue and profit was maintained. In FY2027-H1, we will assess actual results against simple half-year progress benchmarks of ¥314,500 million in revenue, ¥12,000 million in operating profit, ¥11,200 million in ordinary profit and ¥7,100 million in net profit. Another issue is whether the drivers of operating profit growth will be explained in monetary terms, including not only sales volumes at large stores but also gross profit per unit, inventory valuation and disposal losses, advertising expenses, personnel costs, and rent and land charges.