RISO KYOIKU GROUP CORPORATION

Business Details

Provides fully one-on-one preparatory individualized tutoring for students of all grade levels under the "TOMAS" brand. Operates directly-managed individualized instruction rooms, each equipped with a blackboard, under a "one student, one teacher per room" policy, centered on the Tokyo metropolitan area (Tokyo and three surrounding prefectures). Also operates "MEDIC TOMAS," specializing in medical school entrance exam preparation, and "Inter TOMAS," a one-on-one English conversation service. External customer sales in Q1 of FY2027 (ending February 2027) (March–May 2026) were ¥3,571 million, accounting for approximately 48% of the group's consolidated sales of ¥7,403 million, making it the largest segment.

Recent Overview

Q1 sales up 2.6% year-on-year; loss significantly narrowed

In Q1 of FY2027 (ending February 2027) (March–May 2026), Cram School Business sales were ¥3,571 million (up 2.6% year-on-year), an increase. The segment loss was ¥215 million, significantly narrowed from ¥659 million in the same period of the prior year. As a new location, MEDIC TOMAS Ikebukuro school (Tokyo) was opened, and the TOMAS Omori, TOMAS Kashiwa, and TOMAS Fujisawa schools were renovated. The rollout of the "Sundai Diverse" video lesson service to all locations is also being promoted. Note that Q1 tends to show a seasonal loss due to the start of the new school term, with a full-year profit expected.

Key Products

Growth Drivers

• Expansion of student numbers through continuous opening of new locations (in Q1 of FY2027 (ending February 2027), a new MEDIC TOMAS Ikebukuro school was opened)
• Improved capacity and customer satisfaction through renovation and expansion of existing schools (Omori, Kashiwa, and Fujisawa schools renovated)
• Establishment of a new revenue base through the rollout of the "Sundai Diverse" video lesson service to all locations
• Acquisition of new customers through openings in the education-focused building "Kodomo Depart" (Nakano and Tama Plaza already opened)
• Centralization of advertising and marketing functions and efficiency gains in advertising expenses through the transition to a holding company structure
• Promotion of customer migration from Shinga's Club to TOMAS through the "lock-in strategy"
• Reduction of administrative work time and maximization of customer satisfaction through AI utilization by the DX Promotion Department

Risks

• Continuous decline in the target population due to the declining birthrate
• Rising recruitment and labor costs associated with securing instructors (difficulty securing quality instructors due to wage increase trends in other industries)
• Risk that the number of enrolled students at the start of the period falls below plan
• Increase in fixed costs due to factors such as rising energy prices
• Costs of responding to diversifying entrance exam formats, including the new curriculum exams and expansion of comprehensive selection admissions starting in academic year 2025
• Risk of delayed response to adaptive learning utilizing generative AI and other technologies
• Structural earnings volatility risk, with Q1 and Q3 seasonally posting losses