FY2026 revenue forecast maintained, while impairment charges significantly reduce the profit forecast

As of 12 August, cumulative third-quarter results were revenue of ¥46,444 million, operating profit of ¥1,329 million, ordinary profit of ¥1,301 million and quarterly net income of ¥883 million. Revenue was up 6.8% year on year and operating profit was up 27.4%. Progress against the original full-year forecasts of ¥61,500 million in revenue, ¥1,680 million in operating profit and ¥1,200 million in net income was 75.5%, 79.1% and 73.6%, respectively. At the time of the third-quarter results, the full-year forecasts were unchanged, with operating profit ahead of revenue in terms of progress.

However, in the performance forecast revision announced on 25 September, the revenue forecast was maintained at ¥61,500 million, while the operating profit forecast was lowered from ¥1,680 million to ¥1,560 million and the net income forecast from ¥1,200 million to ¥200 million. A summary of the news disclosure explained that the company would record a ¥1,326 million impairment loss against a backdrop of rising commodity and energy prices, including those caused by worsening conditions in the Middle East, higher prices for oil-refining materials, and the Chitose store, which opened in November 2024, performing well below plan. Rather than a shortfall in revenue scale, the key issue is that cost burdens and extraordinary losses are weighing on net income.

For the full-year results, the first step will be to confirm whether operating profit reached the revised forecast of ¥1,560 million, then determine where the variance arose, including gross margin, selling, general and administrative expenses, personnel costs and energy-related expenses. It will also be necessary to confirm whether the ¥1,326 million impairment loss relates solely to the Chitose store or includes other stores, and the assumptions used to calculate recoverable value. As of the end of the third quarter, no impairment loss had been recorded and losses on disposal of fixed assets were only ¥2.233 million. Accordingly, an explanation of why extraordinary losses increased sharply at year-end will be important.