FY2027-Q1: revenue rose, but profit declined due to promotional expenses; normalization of the profit margin to be confirmed in the first half

FY2027-Q1 revenue was ¥2,037 million, up 12.7% year on year, while operating profit was ¥99 million, down 14.8%. The full-year forecasts are revenue of ¥8,500 million and operating profit of ¥450 million, giving Q1 progress rates of approximately 24.0% for revenue and 22.0% for operating profit. Under a simple equal quarterly allocation, both revenue and operating profit are broadly in line with the elapsed period, but the company has seasonal factors, so progress against the plan on a first-half cumulative basis needs to be confirmed.

In the year-earlier period, revenue was ¥1,807 million and operating profit was ¥116 million. Thus, despite a ¥230 million increase in revenue, operating profit fell by ¥17 million. The operating margin calculated from revenue and operating profit declined from approximately 6.4% in the year-earlier period to approximately 4.9% in the current period, also below the 5.3% recorded for FY2026 as a whole. Revenue growth itself remains intact, but the fact that profit growth has not kept pace with revenue growth is the most important issue to verify in the next half-year.

The company explains that following changes to the benefits-tier system in September 2025, promotional expenses that had previously been recognized in the second and fourth quarters began to arise monthly, increasing promotional expenses in Q1. At the same time, it describes the impact on total annual expenses as minor. However, the Q1 promotional expense amount, the year-on-year difference, the impact on cost of sales and SG&A expenses, and the total annual expense amount have not been disclosed in specific terms, leaving insufficient information to verify the extent of the margin decline on an absolute-value basis.

In FY2027-H1, we will look at year-on-year revenue growth, the buildup from operating profit of ¥99 million, the operating margin, and the monthly or first-half cumulative amount of promotional expenses. If only the timing of promotional expense recognition has changed, the margin could return to around the FY2026 full-year level of 5.3% on a first-half cumulative or full-year basis. If customer acquisition costs have increased on a recurring basis, however, this would affect the likelihood of achieving the full-year operating profit forecast of ¥450 million.