First-half forecast raised, but full-year forecast unchanged, leaving limited room for additional second-half profit

In the first quarter of the fiscal year ending February 2027, operating revenue was ¥2,939 million, down 1.0% year on year, operating profit was ¥66 million, down 16.0%, ordinary profit was ¥66 million, down 27.9%, and quarterly net profit attributable to owners of the parent was ¥55 million, down 1.0%. Progress against the full-year operating profit forecast of ¥261 million was approximately 25.3%, while the progress rate for operating revenue was approximately 23.5%. Profit progress was broadly in line with the elapsed portion of the fiscal year, but both revenue and profit started below the previous year.

In the earnings forecast revision announced on 30 September, the cumulative second-quarter ordinary profit forecast was raised by ¥60 million, from the previous ¥140 million to ¥200 million. The revision rate was approximately 43.6%. The company attributed the increase in profit to the external retail and frozen-food businesses operated by the factory division outperforming plan, despite continued increases in raw material prices and labor costs. Meanwhile, operating revenue is expected to come in slightly below the previous forecast because of delays in new store openings. It will therefore be important to determine whether profit growth depends on the business mix and improved margins rather than top-line expansion.

The full-year ordinary profit forecast remains unchanged at ¥259 million. On this basis, if first-half ordinary profit reaches ¥200 million, the ordinary profit required in the second half would be ¥59 million on a simple calculation. Since first-quarter results were ¥66 million, the first-half upward revision itself appears achievable. However, the small amount of profit required in the second half makes it difficult to determine whether the full-year forecast is a conservative level that already incorporates strong first-half performance or whether it reflects higher costs and seasonality in the second half. At the earnings release, it will be important to check the relationship between second-quarter standalone profit, cumulative profit and the second-half plan.

Cumulative second-quarter same-store sales are also reported to have been 101.9% of the previous year, while operating revenue is expected to fall below plan because of delays in store openings. If same-store sales are holding up while store expansion is lagging, achieving the full-year revenue forecast of ¥12,532 million will require an acceleration in new store openings and external factory sales in the second half. Whether the company discloses first-half segment revenue, operating profit, store openings and the factory division's contribution to profit together will be a key factor in assessing the reliability of the full-year forecast.