First-half sales are ahead of schedule; Q3 will show whether the full-year plan is exceeded and margins recover

First-half sales were ¥3,008.875 million, operating income was ¥636.960 million, ordinary income was ¥653.174 million, and interim net income attributable to owners of the parent was ¥456.491 million. The full-year forecasts are ¥5,454 million in sales, ¥1,355 million in operating income, ¥1,362 million in ordinary income and ¥940 million in net income, giving simple progress rates of 55.2%, 47.0%, 48.0% and 48.6%, respectively. Sales were above the 50% mark at the halfway point of the fiscal year, while operating income was below 50%, meaning that revenue growth was ahead of profit growth in the first half.

First-quarter sales were ¥1,460 million and operating income was ¥373 million. The earnings presentation materials stated that standalone second-quarter sales were approximately ¥1.54 billion, operating income was approximately ¥260 million and operating margin was 17.0%; operating income declined 1.5% year on year. Cumulative first-half operating margin was approximately 21.2%, while the quarterly margin declined due to factors including investment spending. The focus in Q3 will therefore be whether this decline was temporary or structural and likely to continue into the second half.

To achieve 75% progress against the full-year plan by Q3, the company needs to add approximately ¥1,082 million in sales and approximately ¥379 million in operating income from the first-half level. In particular, a key benchmark for operating income will be whether the company can secure at least approximately ¥380 million in Q3 alone while absorbing first-half advertising and personnel investments. In the next earnings release, the focus will be on whether sales, operating income and operating margin are disclosed both quarterly and cumulatively, and whether maintaining the full-year forecast reflects a conservative judgment or the incorporation of additional investment.