FY2027 fiscal Q1: revenue up, profit down, with profit recovery to be assessed in the first half

Q1, covering April to June 2026, generated revenue of ¥1,856 million, operating profit of ¥160 million, ordinary profit of ¥243 million, and profit attributable to owners of the parent of ¥164 million. Revenue increased 0.3% from ¥1,849 million in the same period of the previous year, while operating profit fell 11.8% from ¥182 million. The operating margin was approximately 8.6%, down approximately 1.2 percentage points from approximately 9.8% a year earlier, indicating that the recovery in the top line has not yet translated into profit.

By segment, the apparel business generated revenue of ¥1,342 million and an operating loss of ¥14 million; the textile business generated revenue of ¥257 million and operating profit of ¥14 million; and the estate business generated revenue of ¥256 million and operating profit of ¥163 million. The apparel loss narrowed from an operating loss of ¥40 million in the same period of the previous year, but the business has not yet returned to profitability. Textile revenue increased 11.4% year on year, while operating profit fell 49.3%. Estate revenue also increased, but operating profit declined 16.9%.

The company maintained its full-year forecasts of ¥8,000 million in revenue, ¥900 million in operating profit, ¥1,050 million in ordinary profit, ¥700 million in net profit, and annual dividends of ¥18 per share. As of Q1, progress toward the full-year forecasts was 23.2% for revenue and 17.8% for operating profit, with profit progress lagging revenue progress. On a simple calculation, after Q1 the company needs ¥6,144 million in revenue and ¥740 million in operating profit to meet its full-year forecasts. For FY2027-H1, the minimum comparison benchmarks are the previous-year figures of ¥3,771 million in revenue and ¥320 million in operating profit.

The Q1 discussion cited cautious purchasing driven by rising prices and consumers’ focus on protecting their household budgets, as well as rebranding, new-customer acquisition, expansion of EC and digital memberships, inventory control, and stronger full-price sales. However, the company has not disclosed how many millions of yen these initiatives contributed to revenue or operating profit, or the extent of their contribution by brand and sales channel. It also did not prepare a cash flow statement for Q1 and held no results briefing or supplementary earnings presentation. At the next results announcement, we would like to assess the cumulative first-half margins, the impact of each initiative, and the likelihood that the full-year forecasts will be maintained.