Q1 earnings progress is strong, but the focus is on whether first-half performance, including the August slowdown in same-store sales, is repeatable

First-quarter revenue for the fiscal year ending February 2027 was ¥63,466 million and operating profit was ¥5,647 million, both up 5.5% year on year. The full-year forecasts are revenue of ¥247,000 million and operating profit of ¥12,800 million, implying simple progress rates of 25.7% and 44.1%, respectively. Revenue was broadly in line with the 25% expected after three months, while operating profit was well ahead of revenue, indicating that margins were high in the first half of the first half. However, apparel is seasonal, so first-quarter earnings progress cannot be taken as a direct indication of the likelihood of achieving the full-year forecast.

At the first-quarter results briefing, the company indicated that revenue from directly operated stores and other channels rose 11.7% year on year, while EC revenue increased 5.2%. By contrast, August 2026 same-store sales fell 3.7% year on year, indicating a divergence between quarterly revenue growth and the trend in the latest month. As August same-store sales represent the final month of the second quarter, it will be necessary to confirm on a first-half cumulative basis which of stores and EC offset the slowdown, and whether the decline in same-store sales was temporary.

The company left its first-half and full-year forecasts unchanged and said it would pursue marketing initiatives in the second quarter to address changes in the business environment. However, the materials provided offer limited explanation of the levels assumed for first-half revenue and operating profit, or how the August same-store sales slowdown has been incorporated into the full-year plan. At the next results announcement, we would like to confirm not only first-half cumulative results, but also the basis for maintaining the full-year forecasts of ¥247,000 million and ¥12,800 million, sales growth by channel, and the company’s assessment of its first-half forecast.