Whether the Q1 slowdown will bottom out in FY2027-H1

For FY2027-Q1, the 3-month period from 1 April to 30 June 2026, revenue was ¥28,214 million, operating profit was ¥1,415 million, ordinary profit was ¥1,608 million and quarterly net profit attributable to owners of the parent was ¥988 million. Compared with revenue of ¥29,668 million and operating profit of ¥2,998 million in the same period of the previous year, revenue declined by ¥1,454 million and operating profit by ¥1,582 million. The operating margin also fell from approximately 10.1% a year earlier to 5.0%.

The FY2027 full-year plan calls for revenue of ¥121,357 million, operating profit of ¥10,951 million and net profit attributable to owners of the parent of ¥7,096 million. Comparing Q1 results simply with the full-year plan gives progress of 23.3% for revenue, 12.9% for operating profit and 13.9% for net profit. Operating profit progress was 10.4 percentage points below revenue progress, so unless the margin recovers in H1, achievement of the full-year plan will be more challenging on the profit side than on the revenue side.

The company cited the reversal of the significant revenue increase generated by media exposure, including television programs, in the same period of the previous year, the normalization of delivery demand and consumers' greater frugality due to higher prices as factors behind the Q1 revenue decline. On the profit side, higher raw-material prices and labor costs also had an impact in addition to lower revenue. However, the Q1 data provided do not disclose the amounts by which dine-in, takeout and delivery affected revenue and profit.

In the next H1 results, it will be necessary to review not only revenue and operating profit, but also progress against the full-year plan, the operating margin, customer numbers and average spend by usage occasion, and the amount of cost increases by factor. Although the Q1 assessment indicates that the forecasts for cumulative Q2 and the full year will not be changed, the figures themselves have not been provided. It will therefore also be important to see whether the H1 results reproduce or revise the plan and provide a specific explanation of progress.