LIBERTA CO.,LTD.

Business Details

The only segment of the Group. Spanning multiple genres—Cosmetics, Toiletries, Functional Apparel, Water Purifiers and Medical Devices, and Others—the Group plans and produces its own brands on a fabless basis and sells them through domestic retail chains, wholesalers, and EC channels. Overseas, products are exported directly to more than 60 countries. Customer relationship activities using an NPS metric leveraging the customer database have achieved improved repeat rates and a long-tail sales pattern. Consolidated net sales for the first quarter of FY2026 (ending March 2026) (January to March) were ¥1,857 million (up 16.0% year on year).

Recent Overview

Net sales rose 16.0% year on year to ¥1,857 million, but the operating loss widened significantly due to a sharp increase in SG&A expenses

In the first quarter of FY2026 (ending December 2026) (January to March), sales increased across all genres, with net sales reaching ¥1,857 million (up 16.0% year on year). On the other hand, selling, general and administrative expenses increased substantially from ¥786 million in the same period of the prior year to ¥1,041 million, causing the gross profit margin to decline from 38.1% to 33.7%, and the operating loss widened to △¥415 million (compared with △¥176 million in the same period of the prior year). As a subsequent event, on April 1, 2026, the Company made Claire Corporation, a fabless skincare manufacturer, a wholly owned subsidiary at an acquisition cost of ¥841 million (cash consideration). The Company borrowed ¥840 million from Mizuho Bank (repayment due March 2031), with financial covenants attached (maintenance of net assets and prohibition of ordinary losses for two consecutive periods). Due to the sale of land and buildings associated with the relocation of the head office of subsidiary Family Service Eiko, property, plant and equipment decreased by ¥523 million, and interest-bearing debt decreased by ¥442 million following loan repayments.

Key Products

Growth Drivers

• Expansion of the toiletries genre driven by the continued strong performance of "Hedoro Tornado" (up 33.3% year on year in the first quarter)
• Rapid expansion of the functional apparel genre driven by the strengthening of sports retail and home improvement store channels for "FREEZE TECH" (up 47.0% year on year in the first quarter)
• Increased sales in the cosmetics genre driven by the large-scale promotional effect of "Dentiss," increased repeat purchases, the launch of a new flavor, and strengthened EC sales
• Expansion of business domains and complementary drugstore distribution channels through making Claire Corporation (a fabless skincare manufacturer) a wholly owned subsidiary
• Promotion of an M&A-driven growth strategy based on the medium-term management plan (net sales of ¥30 billion and ordinary profit of ¥2 billion for FY2030, ending December 2030)
• Increased sales in the water purifiers and medical devices genre (up 21.4% year on year in the first quarter)

Risks

• Sharp increase in SG&A expenses: SG&A expenses in the first quarter swelled 32.5% year on year to ¥1,041 million, with cost increases outpacing sales growth, widening the operating loss to △¥415 million
• Financial covenant risk: The ¥840 million loan from Mizuho Bank related to the Claire acquisition carries special covenants requiring maintenance of net assets (at least 75% of the base value) and prohibiting ordinary losses for two consecutive periods
• Continued high level of interest-bearing debt: Short-term borrowings of ¥2,450 million and long-term borrowings of ¥1,224 million (including current portion due within one year) remain at high levels, causing the equity ratio to decline to 17.9%
• Dependence on seasonal demand: The first quarter is structurally prone to losses due to seasonality, with high dependence on summer demand (FREEZE TECH) and year-end demand (Hedoro Tornado, etc.)
• Uncertainty over goodwill and acquisition-related costs associated with making Claire a subsidiary: Details of the goodwill amount, acquisition-related costs, and assets and liabilities to be assumed remain undetermined against an acquisition cost of ¥841 million
• Foreign exchange risk: The impact of a continued weak yen trend on the rising cost of imported raw materials and the effect of exchange rates on overseas sales
• Increase in working capital: Inventory of merchandise and products increased from ¥2,249 million to ¥3,120 million in preparation for second-quarter sales, expanding funding needs