MS&Consulting Co., Ltd.

Business Details

The company primarily serves service-industry clients in restaurants, retail, automotive, beauty, leisure, and other sectors, offering its core service, Mystery Shopping Research (MSR), a customer satisfaction mystery shopping survey, combined with Consulting & Training, Store Customer Acquisition Support LBO (Elbo), SV Navi, and recruitment services. It supports client companies in achieving Service Profit Chain (SPC) management and adopts a stock-type business model based on recurring orders. The company maintains a domestic monitor base and also operates overseas subsidiaries (Thailand and Taiwan). From this fiscal period, it manages its products under the categories of CX domain, Consulting domain, and Other.

Recent Overview

Q1 operating loss improved by ¥41 million year-on-year, with a significant rise in gross profit margin

Revenue for the first quarter of FY2027 (ending Feb 2027) (March–May 2026) was ¥515 million (up 3.8% year-on-year). The CX domain declined 3.9% due to the conclusion of a large spot contract, but the Consulting domain drove growth with a 49.8% increase. Gross profit rose sharply to ¥134 million (up 39.7% year-on-year), with the cost-of-sales ratio down 6.7 percentage points and the SG&A ratio down 2.2 percentage points. The MSR gross profit margin improved from 42.6% to 45.5%. Order intake rose 9.2% year-on-year, direct-profit order intake rose 15.5%, and the order backlog increased 10.1% year-on-year. The full-year earnings forecast (revenue of ¥2,757 million, operating profit of ¥355 million) remains unchanged.

Key Products

Growth Drivers

• Continued high growth in the Consulting domain (regular consulting up 57.6%, subsidy/grant consulting up 54.3%), improving the revenue mix
• Improved productivity per report through AI utilization and higher MSR gross profit margin (42.6% → 45.5%)
• Advancement of the stock-business transformation of Store Customer Acquisition Support LBO (up 228.0% year-on-year)
• Expansion of overseas-related surveys (MSR overseas-related surveys up 22.6%) and development of monitor base and operations in overseas areas
• Improved visibility of future revenue through growth in order backlog (up 10.1% year-on-year)
• Continued reduction in cost-of-sales ratio and SG&A ratio through the establishment of company-wide profitability improvement measures

Risks

• Deterioration in the business environment of client companies in domestic-demand-driven service industries such as restaurants and retail, the company's main customers, due to rising prices and labor costs
• Decline in CX-domain revenue following the conclusion of a large spot contract in the prior fiscal year, and uncertainty regarding the acquisition of new large-scale projects
• Negative impact on the Other domain from the discontinuation of the bino service and the halt of cost-reduction product sales, along with the risk of delayed monetization of new services
• Risks in the subsidy/grant support field related to policy changes, declining adoption rates, and delays in screening
• Difficulty in securing and training specialized personnel in consulting, production management, and system development (increases in depreciation and labor costs due to staffing increases and training investment)
• Risk of impairment of goodwill (¥1,826 million), given that an impairment loss of ¥398 million was recorded in the prior fiscal year
• Structural seasonality resulting in an operating loss in the first quarter, requiring order and revenue accumulation in the latter half of the year to achieve the full-year forecast