FY2027 operating profitability hinges on the feasibility of an aggressive expansion plan including M&A and new businesses

Consolidated revenue in FY2026 increased just 0.3% year on year to ¥1,850.5 million, while the operating loss widened to ¥52.2 million, the ordinary loss to ¥98.6 million and the net loss attributable to owners of the parent to ¥105.9 million. The operating margin was also negative 2.8%. Despite maintaining its revenue scale, the company was unable to absorb its costs and upfront investments, providing the starting point for FY2027-Q1.

For FY2027, the company forecasts revenue of ¥3,600 million, operating income of ¥60 million, ordinary income of ¥50 million and net income of ¥30 million. This represents approximately 94.5% growth in revenue from FY2026, with the operating margin expected to recover to approximately 1.7%. However, the company has not disclosed a segment-by-segment forecast for FY2027 revenue or profit. It is therefore not possible to determine how much of the ¥3,600 million is expected to come from its directly operated salons, BS salons, hair and makeup, salon support, career design, acquired companies, and new AI and DX businesses.

At the end of FY2026, cash flow from operating activities was an outflow of ¥71.5 million and cash flow from investing activities was an outflow of ¥129.3 million. Cash flow from financing activities, an inflow of ¥131.8 million, effectively covered the cash outflows. The company also states that circumstances exist that raise substantial doubt about its ability to continue as a going concern because of its operating loss and negative operating cash flow, although the notes on going concern in the earnings summary state that there are no applicable matters. In light of this discrepancy, Q1 should be assessed based not only on operating income and loss, but also on trends in cash, borrowings and the equity ratio.

FY2027-Q1 will be the first period in which the approximately ¥1 billion raised through the issuance of new shares in July 2026, the new share acquisition rights expected to raise approximately ¥3.5 billion if fully exercised, and the 51% acquisition of オアシスLH are reflected in full-year results. Against the backdrop of revenue of ¥456 million and an operating loss of ¥14 million in the same period of the previous year, it will therefore be important to see how clearly the company explains whether profitability is being achieved merely through cost reductions or whether revenue contributions from acquisitions and new businesses have begun.