FY2027: Revenue growth to continue, but profit growth will depend on the ability to absorb costs

For the fiscal year ended June 2026, revenue was ¥7,112 million, up 11.5% year on year, operating profit was ¥813 million, up 5.4%, ordinary profit was ¥831 million, up 4.3%, and net income was ¥584 million, up 4.0%. Growth below operating profit was slower than revenue growth, and the operating margin fell 0.7 percentage points from 12.1% in the previous fiscal year to 11.4%. Revenue in the previous fiscal year was ¥6,376 million and operating profit was ¥771 million. Revenue growth itself therefore remains intact, but the margin reflects the cost burden associated with expanding the company’s locations.

In the ordinary profit bridge, the previous fiscal year’s ordinary profit of ¥798 million was lifted by ¥735 million from higher revenue. This was offset by ¥477 million in higher costs, including labor costs, ¥67 million in new-location expenses and other costs excluding labor costs, and ¥158 million in SG&A and non-operating expenses, resulting in ordinary profit of ¥831 million. Most of the profit contribution from revenue growth was absorbed by additional staffing, the launch of new locations and administrative costs.

For the fiscal year ending June 2027, the company forecasts revenue of ¥8,020 million, operating profit of ¥895 million, ordinary profit of ¥901 million and net income of ¥634 million. The ordinary profit plan starts with ¥831 million in the previous fiscal year and incorporates a ¥907 million increase in revenue, ¥585 million in higher costs including labor costs, ¥55 million in new-location expenses and other costs excluding labor costs, and ¥197 million in SG&A and non-operating expenses, resulting in ¥901 million. The plan assumes a ¥837 million increase in costs, equivalent to approximately 92% of the increase in revenue, leaving ordinary profit growth at ¥70 million, or 8.3% year on year. The planned operating margin is also approximately 11.2%, which is not designed to substantially exceed the 11.4% recorded for the fiscal year ended June 2026.

In the next first quarter of the fiscal year ending June 2027, it will be necessary to assess not only the headline rate of revenue growth, but also whether revenue is progressing toward the full-year forecast of ¥8,020 million and how much operating profit has accumulated against the ¥895 million plan. In particular, the rate of increase in labor costs, expenses related to newly opened locations and changes in SG&A and non-operating expenses will determine the margin for the fiscal year ending June 2027. It will also be important to see whether standalone three-month figures, margins and any decision to maintain or revise the full-year forecasts are disclosed for the first quarter.