Full-year guidance maintained, but nine-month results are ahead on revenue, leaving a fourth-quarter burden on operating profit

For the nine months of FY2026, revenue was ¥155,941 million, up 6.3% year on year, operating profit was ¥5,861 million, up 14.3%, and ordinary profit was ¥5,585 million, up 18.0%. Revenue and profit increased through the operating-profit line, confirming business expansion and profit improvement at least through the third quarter. However, profit attributable to owners of the parent was ¥2,650 million, down 3.2%, showing that the growth in operating profit has not flowed through directly to bottom-line profit.

Progress against full-year guidance was approximately 76.1% for revenue, calculated as ¥155,941 million divided by ¥205,000 million, and approximately 69.0% for operating profit, calculated as ¥5,861 million divided by ¥8,500 million. Revenue exceeded the simple 75% benchmark at the third-quarter stage, while operating profit lagged revenue by approximately 7.1 percentage points. The fourth quarter therefore needs to generate revenue of ¥49,059 million and operating profit of ¥2,639 million, requiring an operating margin of approximately 5.4% in the quarter alone. As this is above the nine-month operating margin of approximately 3.8%, confirmation of margin improvement, not merely continued revenue growth, will be important.

Gakken Group explains that, in education, sales of books and textbooks for elementary and junior high school students and products for preschools are concentrated in the second quarter, while the third quarter tends to have a lower contribution from revenue and operating profit because of the post-new-school-year slowdown. In healthcare and welfare, by contrast, profitability tends to improve from the third quarter onward because of the cost structure, including facility-opening preparation costs. Given this seasonality, it is too early to conclude that the company will miss its target based solely on 69.0% progress in operating profit. However, meeting the full-year plan will require both a profit contribution from healthcare and welfare and a recovery in education-sector profit.

At the next full-year results announcement, it will be important to review not only the final result against the ¥8,500 million full-year operating profit forecast, but also fourth-quarter revenue and operating margin, the profit contributions from education and healthcare and welfare, and changes in company-wide expenses and eliminations. Full-year guidance had not been revised as of the third quarter, and the annual dividend forecast is ¥29. The key issue at the next results announcement will therefore be how the company explains the gap between operating profit and net profit while maintaining its earnings forecasts.