PATH corporation

Business Details

Consolidated subsidiary Madrex Co., Ltd. operates primarily with the "EX:BEAUTE" brand of cosmetics (Cosmetics Business), while Jiva Studio Co., Ltd. plans and develops products under the theme of "beauty and health" and operates across a wide range of channels including TV shopping as its main channel, as well as catalog, web, and in-store sales (Beauty & Wellness Business). Combined revenue for both businesses in FY2026 (ending March 2026) was ¥1,805 million, accounting for approximately 76% of consolidated revenue.

Recent Overview

In the Cosmetics Business, revenue increased but upfront advertising investment has yet to be recovered; in the Beauty & Wellness Business, revenue declined due to a delayed new product launch, resulting in an operating loss

In FY2026 (ending March 2026), revenue in the Cosmetics Business rose 18.8% year on year to ¥949 million, driven by the launch of the new NOWL brand, but the returns on upfront investment in advertising and sales promotion expenses fell significantly short of initial expectations, widening the operating loss from ¥44 million in the prior period to ¥248 million. In the Beauty & Wellness Business, revenue fell by ¥187 million year on year to ¥856 million due to a delayed new product launch caused by supply chain issues, and combined with increased DtoC-related expenses, the segment swung from operating income of ¥42 million in the prior period to an operating loss of ¥82 million.

Key Products

Growth Drivers

• Continued strong performance of long-selling products in the "EX:BEAUTE" cooling cosmetics series (such as Cool Fit Cover Powder)
• Acquisition of new customer segments and accumulation of repeat purchases through the new "NOWL" brand series
• Improved profit margins in the Beauty & Wellness Business through an increased proportion of in-house brand products
• Initiatives to improve LTV (customer lifetime value) through development of the DtoC (direct sales) channel
• Cultivation of loyal customers and establishment of a repeat business model through advanced CRM
• Strengthened approach to potential customers and expansion of new customer segments through a media mix strategy

Risks

• Risk that the effect of upfront investment in advertising and sales promotion expenses falls below initial plans (materialized in the Cosmetics Business in FY2026, ending March 2026, with the operating loss widening by ¥204 million year on year)
• Risk of failing to meet sales forecasts due to insufficient market penetration of new products and repeat purchase rates below target (materialized in the NOWL series)
• Risk of lost sales opportunities due to delayed launch of strategic products (materialized in the Beauty & Wellness Business due to supply chain issues)
• Risk of ballooning selling, general and administrative expenses due to increased DtoC-related system costs, advertising expenses, and outsourcing fees
• Material events regarding going concern assumptions: with the consolidated operating loss expanding significantly to ¥774 million and net loss to ¥1,276 million in FY2026 (ending March 2026), there is a risk that deterioration of the Group's overall financial base will constrain capacity for business investment
• Risk of intensified selective consumer spending due to rising procurement costs from yen depreciation and import inflation, along with declining real purchasing power