The primary source of the consolidated deficit shifted from existing businesses to new investment businesses

FY2027-Q1 consolidated revenue was ¥670.142 million, down 8.4% year on year. The operating loss was ¥129.421 million, the ordinary loss was ¥145.348 million, and the quarterly net loss attributable to owners of the parent was ¥147.448 million, resulting in losses at every stage of the income statement. In addition to the decline in revenue, initial costs for the new investment businesses and costs associated with financing weighed on the consolidated loss. This will be the first point to verify in the next earnings release.

By segment, the kimono business reported revenue of ¥156.643 million and a segment operating loss of ¥11.365 million. The fashion business reported revenue of ¥329.522 million and operating income of ¥3.873 million. The materials business reported revenue of ¥171.598 million and an operating loss of ¥6.895 million. The combined operating loss of these 3 businesses was approximately ¥14.387 million, indicating that profitability in the existing businesses has improved to some extent.

By contrast, the “Other” category reported revenue of ¥12.377 million and an operating loss of ¥48.887 million. Although revenue was small, the loss substantially exceeded the combined loss of the 3 existing businesses and cannot be ignored as a factor behind the expansion of the consolidated operating loss to ¥129.421 million. The latest disclosure did not break down the loss under “Other” by amount, including initial costs for the investment businesses, financing costs, and existing lifestyle-related expenses.

In FY2027-H1, the focus should be not only on whether the consolidated operating loss narrows, but also on separately assessing the 3 existing businesses and “Other.” Key indicators will include whether the combined loss of the 3 existing businesses remains within approximately ¥14.39 million, whether the fashion business maintains operating profitability, and whether the materials business improves on its 17.0% year-on-year revenue decline. At the same time, the company needs to provide disclosure that allows investors to determine whether the ¥48.89 million operating loss under “Other” reflects one-off startup costs or a continuing loss structure in the investment businesses.