First-half revenue is ahead of schedule, with the focus shifting to how much profit can be accumulated against the full-year plan

First-half revenue was ¥82,275 million, up 4.4% year on year, operating profit was ¥3,315 million, up 3.8%, ordinary profit was ¥3,526 million, up 5.0%, and interim net profit attributable to owners of the parent was ¥2,201 million, up 10.8%. Although both revenue and profit increased, operating profit growth was 1.0 percentage point below revenue growth. Whether margins improved sufficiently should be assessed at the next results announcement.

Progress against the full-year forecasts was 47.1% for revenue, 37.0% for operating profit, 40.1% for ordinary profit, and 38.6% for net profit attributable to owners of the parent. Revenue was almost at the level expected for half a fiscal year, while operating profit remained below 40%. The company has maintained its full-year forecasts of ¥174,800 million in revenue, ¥8,950 million in operating profit, ¥8,800 million in ordinary profit, and ¥5,700 million in net profit. Accordingly, by the cumulative third quarter, the key issue will be how much operating profit progress against the full-year forecast improves, in addition to the expansion of revenue.

At the next results announcement, the year-on-year changes for the cumulative third quarter and the progress rates against the full-year forecasts for revenue and each profit measure should be reviewed on the same basis. In particular, the key point for operating profit will be whether progress rises clearly above the first-half level of 37.0%, even after taking seasonality and second-half store-opening costs into account. Although interim results have been disclosed for the first half, standalone third-quarter profit, the profit required in the second half, and the quarterly profit plan have not been sufficiently broken down.

The financial summary in the earnings release also does not disclose the operating margin or consolidated changes by price, volume, and cost. The next results announcement should be checked for numerical disclosure of the factors behind the ¥3,315 million operating profit, changes in selling, general and administrative expenses and costs, and the cost burden remaining in the second half.