Tracking the Q1 revenue decline and loss on a post-portfolio-change basis

Revenue in Q1 of the fiscal year ending March 2027 was ¥2,672 million, down 20.6% from ¥3,365 million in the same quarter of the previous year. Operating results turned from a profit of ¥203 million in the same quarter of the previous year to a loss of ¥49 million, while ordinary loss was ¥24 million and net loss for the quarter was ¥54 million. The fact that operating, ordinary and net results were all in the red is the starting point for FY2027 H1.

Q1 revenue represented 22.5% of the full-year forecast of ¥11,895 million, about 2.5 percentage points below the 25% implied by the elapsed period. The operating loss of ¥49 million was only 8.3% of the full-year operating loss forecast of ¥587 million, but progress against a loss forecast cannot be assessed in the same way as progress against a profit forecast, so it cannot simply be judged to be within plan. As of Q1, the company had not changed its full-year forecasts of revenue, an operating loss of ¥587 million, an ordinary loss of ¥604 million and a net loss of ¥432 million. The key point to monitor is how far revenue and earnings progress by the end of Q2.

The main factors cited for the revenue decline were the closure at the end of March 2026 of Tokyo Shiba Tofuya Ukai and the transfer of the Hakone Venetian Glass Museum business to another company. The company also cited higher labor costs due to labor shortages, persistently high raw-material prices and energy costs, and consumers’ growing preference to save. However, it has not disclosed a bridge breaking down the monetary impact of closures, the business transfer, existing-store demand and costs. In H1, it will be important to see whether the company discloses enough to distinguish structurally lower revenue resulting from the portfolio changes from insufficient recovery in the existing businesses.