E-commerce losses narrowed despite lower revenue, but a sharp recovery from Q3 onward is needed to achieve the full-year forecast

Consolidated revenue in H1 FY2026 was ¥19,815 million, down 6.9% year on year, while the operating loss was ¥1,090 million. Although the operating loss narrowed by ¥256 million from ¥1,346 million in the year-earlier period, revenue has not recovered. In the e-commerce business, revenue was ¥16,836 million, down 8.1% year on year, and the operating loss was ¥1,299 million, meaning that the business accounted for most of the consolidated operating loss.

In August, the company revised its FY2026 full-year forecast to revenue of ¥41,000 million, an operating loss of ¥1,200 million, an ordinary loss of ¥1,200 million and zero net income attributable to owners of the parent. H1 revenue of ¥19,815 million represents 48.3% of the full-year forecast, implying that ¥21,185 million in revenue is needed in the second half on a simple calculation. Meanwhile, the operating loss had reached ¥1,090 million by H1, so achieving the revised forecast requires the second-half operating loss to be kept within ¥110 million. Achieving a recovery in second-half revenue and an improvement in operating results at the same time will be a considerable challenge.

The consolidated operating profit target for FY2026 presented in the previous fiscal year was ¥200 million, whereas the current revised full-year forecast is an operating loss of ¥1,200 million, a ¥1,400 million gap from the target. This target was presented as a financial metric for performance-linked compensation and is not identical to the company-wide medium-term plan target, but it provides a supplementary measure of the distance from the level of profitability management had envisaged. In the Q3 results, it will be necessary to assess not only the year-on-year change in the loss but also how much loss has accumulated against the revised full-year forecast.

The points to monitor are orders, the number of purchasing members, average spending per customer, gross margin and the efficiency of customer acquisition costs in the e-commerce business. The number of new and reactivated purchasing members showed signs of increasing in H1, while continuing purchasing members and average spending per customer declined, resulting in uneven quality of the revenue recovery. If the e-commerce operating loss exceeds ¥1,299 million on a cumulative Q3 basis, the likelihood increases that additional fixed-cost reductions or temporary earnings factors will be needed to achieve the full-year operating loss forecast of ¥1,200 million.