First-half progress is ahead of the full-year plan, but the company has left its full-year forecasts unchanged given Middle East and procurement risks

Revenue for the first half of the fiscal year ending November 2026 was ¥33.068 billion, up 28.1% year on year, while operating profit was ¥2.058 billion, up 31.2%, and ordinary profit was ¥2.162 billion, up 26.4%. Progress against the full-year forecasts was 52.5% for revenue, 58.8% for operating profit, 58.4% for ordinary profit and 54.8% for interim net profit attributable to owners of the parent. For the first half, both revenue and profit were slightly ahead of plan.

On a standalone quarterly basis, revenue was ¥16.681 billion and operating profit was ¥1.038 billion in the first quarter, while second-quarter revenue was ¥16.386 billion. Based on first-half results, the revenue required in the second half to achieve the full-year forecast is ¥29.932 billion, and the required operating profit is ¥1.442 billion. If the first-half profit pace can simply be maintained, the hurdle for achieving the plan is not high. However, first-half performance included contributions from the two newly consolidated companies, so whether the same growth rate will continue in the second half requires separate confirmation.

Although the company described the first half as steady, it has not changed its full-year forecasts of ¥63.0 billion in revenue, ¥3.5 billion in operating profit, ¥3.7 billion in ordinary profit and ¥3.0 billion in net profit. Its assumptions for the second half include procurement risks and higher procurement costs for certain raw materials due to the Middle East situation, higher purchasing costs resulting from yen depreciation, stagnant fashion apparel demand, and weak performance by Japanese automakers in China and the United States. The company has not disclosed these risks on a monetary basis.

At the next third-quarter results announcement, it will be necessary to check not only the cumulative progress rate through the third quarter but also the certainty of orders and sales against the amounts required in the second half. In particular, it will be important to determine whether higher procurement costs can be absorbed while maintaining the first-half gross margin of 30.6% and operating margin of 6.2%, and whether the realized earnings impact of the risks cited as the reason for leaving the full-year forecasts unchanged will be disclosed.