FY2026 to remain in the black at the operating level, while recovery in net income in the second half is the focus

Revenue in the first half of FY2026 was ¥7,403 million, broadly unchanged from ¥7,406 million in the same period of the previous year. Maintaining the revenue base despite continued store closures is a positive indicator, but the full-year results will need to confirm how far the decline in revenue from the shrinking books and magazines market and the closure of unprofitable stores is being offset by new product categories and initiatives at existing stores.

At the operating level, the company posted an operating profit of ¥40 million and remained profitable. However, ordinary profit was ¥8 million and interim net income attributable to owners of the parent was limited to ¥1 million, representing a substantial decline from operating profit through to net income. Based on the information disclosed for the first half alone, the breakdown of non-operating expenses, interest expense, other non-operating income and expenses, and the tax burden cannot be fully confirmed. The next results will therefore need to be reviewed for a bridge from operating profit to net income.

The company's full-year FY2026 plan calls for revenue of ¥14,000 million, operating profit of ¥40 million and net income attributable to owners of the parent of ¥20 million. First-half revenue represents approximately 52.9% of the full-year plan, implying that revenue of ¥6,597 million will be required in the second half on a simple calculation. Operating profit had already reached the full-year plan at the first-half stage, but it is too early to assume that the plan will simply be achieved, given the potential for seasonality and store-closure costs in the second half.

The key point is that first-half net income was ¥1 million against a full-year plan of ¥20 million. The company needs to secure ¥19 million in net income in the second half, making not only the maintenance of operating profit but also non-operating income and expenses, extraordinary income and expenses, and the tax impact important. The full-year results will need to confirm how ordinary profit and net income were built up while maintaining the ¥40 million operating profit plan, as well as whether there were any plan revisions or one-off gains or losses.