FY2027-H1 downward revision shifts the focus of full-year profitability to H2

In the 25 September earnings forecast revision, the FY2027 operating revenue forecast was cut by ¥4,700 million, from ¥255,500 million to ¥250,800 million. Operating profit was reduced by ¥800 million, from ¥2,100 million to ¥1,300 million, while net income attributable to owners of the parent was reduced by ¥600 million, from ¥650 million to ¥50 million. The downward revision rates were approximately 38.1% for operating profit and 92.3% for net income, indicating that the deterioration in the profit outlook is substantially greater than the reduction in revenue.

The revised first-half forecasts are operating revenue of ¥123,227 million, an operating loss of ¥57 million, ordinary profit of ¥13 million, and an interim net loss attributable to owners of the parent of ¥187 million. Maintaining full-year operating profit of ¥1,300 million would require H2 operating profit of ¥1,357 million on a simple residual basis. This is approximately ¥58 million, or 4.5%, above FY2026 H2 operating profit of approximately ¥1,299 million. For net income, the company would need H2 net income of ¥237 million to absorb the first-half loss of ¥187 million and achieve full-year net income of ¥50 million. FY2026 H2 net income was approximately ¥16 million, calculated by subtracting first-half net income of ¥248 million from full-year net income of ¥264 million, making the recovery hurdle for net income even higher than for operating profit.

The latest FY2027-Q1 results were operating revenue of ¥59,708 million, an operating loss of ¥318 million, an ordinary loss of ¥278 million, and a quarterly net loss attributable to owners of the parent of ¥268 million. In the year-earlier FY2026-Q1, operating revenue was ¥60,044 million, operating profit was ¥59 million, ordinary profit was ¥105 million, and net income was ¥5 million. Revenue declined by only 0.6%, but operating results moved from profit to loss. Achieving the revised first-half forecast will require a substantial improvement in operating results in Q2.

At the next earnings release, the key points will be not only the first-half results but also the assumptions supporting H2 operating profit of ¥1,357 million, including same-store sales, customer numbers, items per transaction, gross margin, and labor costs. At present, the company has disclosed revised full-year forecasts, but no disclosure has been identified that breaks down the H2 profit recovery by contributing factor or provides new numerical targets or a timeframe for achieving them under the medium-term management plan. Whether the full-year forecast can be maintained at the interim results, or whether the H2 assumptions will be revised again, will influence the post-results assessment.