MUSCAT GROUP Inc. 3Q Earnings Call Flash Report

MiiS establishes "SNS × Marketplace" winning formula; Kanarabo PMI builds wholesale and overseas expansion infrastructure; Brand OS enhancement targets simultaneous multi-brand growth

February 12, 2026 at 22:05 GMT+9

Summary

3Q YTD revenue reached JPY 2,822M (+34.7% YoY), driven by the Brand Produce segment at +118.3%. MiiS marketplace EC customer count surged +80% QoQ, validating the SNS × marketplace linkage as a winning formula. However, delays in MiiS wholesale rollout, GPM deterioration at Matsumura Shoten due to JPY weakness, and understaffing in B2B sales left adjusted EBITDA at JPY -50M YTD, with losses persisting. Management is positioning to leverage wholesale know-how acquired through the Kanarabo acquisition and turn JPY depreciation into a structural tailwind, guiding for full-year adjusted EBITDA of JPY 250–350M.

Key Takeaways (Earnings Highlights And Growth Actions)

Corporate Strategy And Market Perspective
- Niche markets share common challenges globally, not just domestically; management flagged plans for overseas expansion
- Amid polarizing consumption trends (low-end vs. premium), Kanarabo will intensify its low-price-tier drugstore distribution strategy
- Management commented that IP-related businesses, in addition to beauty, are under consideration as M&A targets
Current Business Progress And Drivers
- MiiS third-party EC customer count reached 32,664 (+80.2% QoQ); SNS × marketplace synergy drove 3Q results above budget
- TV commercial spend deployed in Q1 failed to translate into drugstore shelf placement and sell-through, with wholesale ROI falling short of expectations
- Matsumura Shoten saw GPM decline ~5pp due to higher procurement costs from JPY weakness; next fiscal year's budget assumes no further yen depreciation from current levels
- B2B segment declined -26.3% YoY on sales staff shortages and price competition; profit erosion in this cash-cow business directly impacted consolidated earnings
Strategic Initiatives And Inflection Points
- Kanarabo derives 92% of revenue from offline channels; its sales force has already been redeployed to MiiS wholesale shelf acquisition with early positive traction
- The EC winning playbook proven at MiiS is ready for lateral rollout to Fujiko and b idol next fiscal year
- Management candidly acknowledged that Brand OS (shared operational platform) remains incomplete, and is urgently pursuing operational efficiencies to support increasing M&A activity
- MOVE.eBike has obtained type approval certification; the company is rebuilding its differentiation strategy to capitalize on tightening regulations as a tailwind

Outlook And Strategy

Full-year adjusted EBITDA guided at JPY 250–350M; key build-up drivers include refined EBITDA definition (add-back of PMI costs, etc.), a 4Q-weighted earnings structure, and B2B fiscal year-end demand
Medium-term vision targets market cap of JPY 10–30B and adjusted EBITDA of JPY 600M–1.3B+ over a ~3-year horizon
M&A pipeline remains active with ~100 deals sourced in six months at EV/EBIT multiples of 3.0–5.0x or below; financial discipline maintained with net D/E ratio of 1.5–2.0x
Management self-identified corporate cost bloat as a key issue, prioritizing a cost structure that does not scale with the addition of new brands
Next fiscal year's top priority is transforming into a profitable structure, with growth investments to be selectively deployed

Positive Factors

MiiS 3Q revenue of JPY 227M (+22% QoQ), with third-party EC marketplace customers surging +80.2% QoQ to a record-high quarterly revenue
Kanarabo (Fujiko, etc.) contributed JPY 297M in 3Q standalone, beginning to contribute to consolidated results just two months post-acquisition
HaD (bialne) subscription retention rates are tracking in line with plan, contributing stable recurring revenue
Brand Produce segment 3Q standalone revenue of JPY 920M marked an all-time high, more than doubling YoY
Matsumura Shoten's proprietary brand "Loco Nail" color rucksack performed well, with Christmas-driven related product sales roughly doubling YoY
B2B revenue per employee reached JPY 8.3M in 3Q, hitting a record high

Concerns / Risks

Operating income was negative JPY 238M on a 3Q YTD basis, sharply deteriorating from positive JPY 31M in the prior year; gross profit margin also declined from 53.9% to 51.0%
Goodwill balance of JPY 2,460M (42.7% of total assets); impairment risk is expanding alongside aggressive M&A activity
Interest-bearing debt totals JPY 3,752M (current: JPY 1,428M + non-current: JPY 2,324M) against net assets of JPY 1,023M, indicating elevated financial leverage
B2B revenue decline is expected to persist into 4Q; securing sales personnel and price competition remain structural challenges
MOVE.eBike faces competitive intensity exceeding assumptions at the time of acquisition; timing of regulatory tightening remains uncertain
Kanarabo's variety store sell-through rate is slightly below expectations, with intensifying competition from Korean cosmetics brands
Full-year adjusted EBITDA target of JPY 250–350M is heavily dependent on 4Q standalone performance, with inherent risk in the March-weighted earnings structure

Key Financial Highlights

3Q YTD revenue reached JPY 2,822M (+34.7% YoY), maintaining growth momentum, while operating income fell to negative JPY 238M, swinging to a loss. The Brand Produce segment at +118.3% drove overall top-line growth, but contraction in the Brand Partner segment and rising costs from JPY weakness pressured profitability. 3Q standalone adjusted EBITDA turned positive at JPY 58M, marking a recovery trend from the Q1 trough of negative JPY 113M.

Consolidated Earnings Summary
Segment Performance Table (3Q YTD)

Account	YTD (3Q)	Prior Year YTD	YoY	Quarterly (3Q Standalone)	Prior Year Quarter	YoY (Quarter)
Revenue	JPY 2,822M	JPY 2,096M	+34.7%	JPY 1,214M	JPY 898M	+35.2%
Operating Income	JPY -238M	JPY 31M	―	JPY -35M	―	―
Net Income	JPY -190M	JPY 17M	―	―	―	―

MiiS 3Q Standalone Revenue: JPY 227M (+22.0% QoQ)
MiiS Third-Party EC Customer Count: 32,664 (+80.2% QoQ)
MiiS Owned EC Members: 4,137 / Average Order Value: JPY 8,151
MOVE.eBike 3Q Standalone Revenue: JPY 58M (+32.8% YoY)
Matsumura Shoten 3Q Standalone Revenue: JPY 200M
Kanarabo 3Q Standalone Revenue: JPY 297M (2 months consolidated)
Brand Partner Revenue Per Employee: JPY 8.3M (record high)
Adjusted EBITDA (3Q YTD): JPY -50M / 3Q Standalone: JPY 58M
Gross Profit Margin: 51.0% (prior year: 53.9%, -2.9pp)
Goodwill Balance: JPY 2,460M (prior year 3Q (FY03/2025 Q3): JPY 762M)

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