Can operating profit recovery catch up with the full-year plan in the first half?

For the fiscal year ended February 2026, revenue was ¥21,283 million, operating profit was ¥615 million, ordinary profit was ¥472 million, and net income attributable to owners of the parent was ¥491 million. By comparison, the company's forecasts for the fiscal year ending February 2027 are revenue of ¥21,000 million, operating profit of ¥800 million, ordinary profit of ¥500 million, and net income of ¥500 million. Although revenue is planned to decline 1.3% year on year, operating profit is expected to increase 30.0%, making margin recovery rather than an increase in sales volume the premise for growth.

First-quarter revenue was ¥4,984 million, or 23.7% of the full-year forecast, while operating profit was ¥96 million, or 12.0%. Compared with the simple time-based progress benchmark of 25% after three months, revenue was broadly on plan, but operating profit progress was 13 percentage points lower. Ordinary profit was ¥2 million, or 0.4% of the ¥500 million full-year forecast, and net income was ¥11 million, or 2.2% of the same ¥500 million forecast, so no recovery below operating profit has yet been confirmed.

Year on year, first-quarter revenue fell 2.3%, operating profit fell 20.5%, ordinary profit fell 97.3%, and net income fell 90.5%. The company explained that inbound demand driven by the weaker yen and high-value spending by affluent consumers are supporting urban areas, while difficult trading conditions continue in regional cities and suburban locations, where inbound demand is limited. However, the company has not provided an earnings forecast that breaks down the impact of individual factors on revenue and profit or separates the seasonality of the first and second halves.

At the next earnings release, it will be necessary to assess how closely first-half revenue of ¥10,500 million and operating profit of ¥400 million approached the simple half-year benchmark based on the full-year forecasts. In particular, it will be important to determine whether the operating margin recovered from 1.93% in the first quarter to above the 2.9% reported for the fiscal year ended February 2026, and whether the basis for maintaining the ¥800 million full-year operating profit forecast lies in product mix, events, or expense control.