CENTRAL SPORTS CO.,LTD.

Business Details

Central Sports upholds the corporate philosophy of "contributing to lifelong health from age zero," operating membership-based sports clubs nationwide through divisions including Fitness, School, Contracted Services, and Pro Shop. The company operates 187 directly managed stores and 70 contracted-service stores (as of the end of March 2026), with fitness membership services and children's swimming and gymnastics school businesses serving as the core of its revenue. It also engages in the designated management and contracted operation of public facilities, building a stable revenue base.

Recent Overview

Net sales, operating profit, and ordinary profit all increased, with profitability improving significantly

In FY2026 (ending March 2026), the company achieved substantial profit growth, with net sales of ¥48,865 million (up 4.9% year on year), operating profit of ¥2,680 million (up 37.7% year on year), and ordinary profit of ¥2,257 million (up 48.1% year on year). The reduction of selling, general and administrative expenses to ¥3,433 million (down 1.8% year on year) contributed to the improvement in profit. On the other hand, due to the recording of extraordinary losses (impairment loss of ¥171 million and store closure loss of ¥261 million) and an increase in corporate taxes and other charges, profit attributable to owners of parent was limited to ¥1,284 million (down 5.5% year on year). For FY2027 (ending March 2027), the company forecasts net sales of ¥50,500 million, ordinary profit of ¥2,700 million, and net income of ¥1,470 million.

Key Products

Growth Drivers

• Expansion of membership fee revenue through new member acquisition and improved retention rates among existing members in the Fitness Division (driving the 4.9% year-on-year increase in net sales)
• Expansion of the 24-hour "Central Sports Gym 24" store network (new openings in FY2026 (ending March 2026) at the Ome and Kita-Sendai Station locations)
• Enhanced customer satisfaction and reduced membership cancellations through improved customer service, coaching quality, facility appearance, and renovation of existing stores
• Expansion of ancillary revenue through the active development of sports and entertainment events (such as "Wellness Style Challenge" and "Lesson in Japan")
• A recovery trend across the fitness industry as a whole, driven by growing health awareness and interest in exercise habits
• New business development through collaboration with regional and educational fields, and expansion of online services
• Enhanced brand value driven by the competitive achievements of affiliated athletes, such as Daiki Hashimoto (three-time consecutive men's individual all-around champion at the World Gymnastics Championships)

Risks

• Cost pressure from rising energy prices and various raw material costs, along with continued increases in labor costs due to minimum wage hikes
• Risk of profit margin compression as cost of sales, at ¥42,751 million (up 3.9% year on year), rose faster than the increase in net sales
• Downward pressure on net income from the continued recording of impairment losses (¥171 million) and store closure losses (¥261 million)
• Intensifying competition amid the expansion of small-format store formats and an increase in new entrants leveraging ICT
• Risk of changes to or termination of lease agreements and contracted-service agreements (contract management across a network of 257 stores)
• The ordinary profit margin of 4.6% remains significantly below the target of 8.0%
• Uncertainty over future prospects due to a heightened savings-oriented mindset in personal consumption amid prolonged price increases, as well as overseas economic slowdown and financial market volatility
• A decline in the level of shareholder returns due to the reduction of the annual dividend per share from ¥50.00 to ¥40.00 (dividend payout ratio of 34.9%)