Key Positives From The 2Q Results
Prolonged rain in June and September weighed on visitor numbers, yet the company still grew both revenue and profit. Revenue reached JPY 2,972M (+4.7% YoY) and operating income JPY 633M (+2.8% YoY). Facilities acquired in the Jogasaki area in March and additional hotel rooms drove the top line. Operating income, which declined in 1Q, returned to growth on a standalone 2Q basis.
- Leisure Holds Up Despite Fewer Visitors: Revenue rose 8.3% even as visitors slipped to 441K (-1.1%). The "Bora Naya" restaurant and "Jogasaki View Terrace" shop, both acquired in the Jogasaki area, offset the decline in visitors.
- Strong Hotel Operating Leverage: Segment profit rose 65.3% and margin expanded to 15.5% (+5.3pt). Additional rooms at Sky Hill Hotel Izu Kogen meant revenue growth flowed strongly through to profit.
- 2Q Profit Back in Growth: Standalone 2Q operating income was JPY 468M (+4.5%, our estimate). This reverses the 1.8% decline in 1Q and shows the business retained its earnings power through the summer peak season.
- Anitouch Spend Per Visitor Up: Revenue per visitor was JPY 1,657 (+7.5%, our estimate). Pricing improved even as visitor numbers fell.
- Robust Balance Sheet: The equity ratio rose to 82.8% (+1.6pt). With cash and deposits of JPY 2,320M against borrowings of JPY 301M, the company is effectively debt-free. This leaves ample capacity for new store openings and M&A.
Key Concerns From The 2Q Results
Anitouch segment profit fell 15.8%, turning the segment into a drag on company-wide profit growth. Operating income progress against the full-year plan stands at 46.9%. That is below the 52.8% achieved at the same point last year (vs. full-year actual). Hitting the plan requires 2H operating income growth of 30.1% vs. prior-year 2H, an unusually 2H-weighted plan.
- Anitouch Traffic Weakness: Visitors fell to 374K (-60K, -13.8%), driving a 7.3% revenue decline. Margin contracted from 30.1% to 27.3%, highlighting weak footfall at existing stores.
- Margin Compression: SG&A rose 5.0%, outpacing revenue growth of 4.7%. Combined with a gross profit margin of 79.5% (-0.2pt), operating income margin fell to 21.3% (-0.4pt).
- FCF Falls Short of Dividends: Free CF was JPY 78M (our estimate), down from JPY 310M a year earlier. This did not cover dividend payments of JPY 366M, and cash and deposits declined by JPY 376M.
- Weather Sensitivity: The company attributed lower visitor numbers to prolonged rain. This again underscores the high weather sensitivity of its outdoor facilities.
Focus Areas / Items To Monitor Going Forward
- Anitouch Turnaround: Key openings include the September renewal of the Minatomirai shop area, the October opening in Kichijoji, and the Kamakura Komachi opening announced in November. The key question is how far these lift visitor numbers and 2H profit.
- Achievability of 2H Operating Income of JPY 717M (Our Estimate): In each of the past two years, 2H profit came in below 1H, so the current plan is 2H-weighted. The debate is whether full-year contributions from the Jogasaki area and the added hotel rooms can close the gap.
- Upfront Investment: Capex on property, plant and equipment (JPY 366M) and purchases of investment securities (JPY 151M) came first. We will watch the payback timeline and how investment is balanced against shareholder returns.
- Breakdown of the 60K decline in Anitouch visitors (existing stores, weather, competitive environment), and recovery measures
- Key assumptions behind 2H operating income of JPY 717M and the expected contribution from each initiative
- Capex for the new Kichijoji and Kamakura Komachi stores, and the impact of opening costs on 2H P&L
- Rationale for the JPY 151M purchase of investment securities and the future investment policy
- Expected full-year revenue and profit contribution from the assets acquired in the Jogasaki area
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 2,972M | +4.7% |
| Cost of Goods Sold | JPY 609M | +5.8% |
| Gross Profit | JPY 2,363M | +4.4% |
| SG&A | JPY 1,729M | +5.0% |
| Operating Income | JPY 633M | +2.8% |
| Non-Operating Income | JPY 38M | +34.7% |
| └Insurance Surrender Proceeds | JPY 10M | +670.2% |
| Recurring Profit | JPY 669M | +4.1% |
| Total Income Taxes | JPY 220M | +9.0% |
| Interim Net Income Attributable to Owners of Parent Company | JPY 449M | +1.9% |
| EPS | JPY 24.25 | +1.5% |
| Interim Comprehensive Income | JPY 444M | -10.2% |
| Visitors (Izu Shaboten Zoo, Izu Granpal Park) | 441K | -1.1% |
| Visitors (Anitouch) | 374K | -13.8% |
- Operating Margin: Operating income margin was 21.3% (-0.4pt, our estimate). Increases in COGS (+5.8%) and SG&A (+5.0%) slightly outpaced revenue growth.
- Recurring Profit: Recurring profit grew faster than operating income at +4.1%, helped by higher insurance surrender proceeds.
- Net Income: Net income rose 1.9%. Growth was held back as the deferred income tax adjustment narrowed from -JPY 16M to -JPY 1M.
- Comprehensive Income: Comprehensive income declined due to a valuation difference on available-for-sale securities of -JPY 5M.
Performance By Business Segment
The revenue mix was Leisure 65.2%, Anitouch 20.8% and Hotel 14.0% (our estimate). Profit gains in Leisure (+JPY 27M) and Hotel (+JPY 25M) more than offset the decline in Anitouch (-JPY 31M).
Segment Performance Table
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Leisure | JPY 1,936M | +8.3% | JPY 400M | +7.4% | 20.7% |
| Anitouch | JPY 619M | -7.3% | JPY 169M | -15.8% | 27.3% |
| Hotel | JPY 416M | +8.8% | JPY 64M | +65.3% | 15.5% |
| Other | JPY 0M | - | -JPY 4M | - | - |
| Adjustments | - | - | JPY 2M | - | - |
*Revenue represents sales to external customers. Margins are our estimates.
- Leisure: Revenue rose 8.3%. Prolonged rain cut visitors at the two main parks by 5K, but "Bora Naya" and "Jogasaki View Terrace," acquired in March, added incremental revenue. Expanding the facility network through M&A is becoming a growth driver.
- Hotel: Revenue rose 8.8% and segment profit 65.3%. Additional rooms at Sky Hill Hotel Izu Kogen contributed, lifting margin from 10.2% to 15.5%.
- Anitouch: Visitors across its six locations nationwide fell from 434K to 374K. Revenue declined 7.3% and profit 15.8%. Revenue per visitor rose 7.5% (our estimate), but this could not offset the drop in traffic.
Progress Versus Full-Year Guidance
Operating income progress against the full-year plan is 46.9% (our estimate). This lags the 52.8% achieved at the same point last year and the 53.7% two years ago (vs. full-year actual). In each of the past two years, 2H operating income of JPY 551M came in below 1H. Meeting the plan requires 2H operating income of JPY 717M (+30.1% vs. prior-year 2H). The ramp-up of new Anitouch stores and full-year contributions from the Jogasaki area and added hotel rooms will be key.
| Item | Value (2Q Cumulative) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 2,972M | JPY 6,000M | 49.5% |
| Operating Income | JPY 633M | JPY 1,350M | 46.9% |
| Recurring Profit | JPY 669M | JPY 1,440M | 46.5% |
| Net Income Attributable to Owners of Parent Company | JPY 449M | JPY 980M | 45.8% |
Changes To Guidance
The company maintained the full-year plan announced on May 15, 2026. The plan calls for revenue of JPY 6,000M (+7.3%), operating income of JPY 1,350M (+15.7%) and net income of JPY 980M (+16.7%). Delivering this profit growth depends on a stronger 2H.
Commentary On Shareholder Returns
The annual dividend forecast was maintained at a year-end dividend of JPY 20.00, flat YoY. This implies a payout ratio of 37.8% on full-year forecast EPS of JPY 52.84 (our estimate). Dividends paid in 1H rose to JPY 366M from JPY 273M a year earlier. There was no change to the share buyback policy.
Financial Position
The company maintains an equity ratio of 82.8% and remains effectively debt-free, with cash far exceeding borrowings. Dividends, capex and purchases of investment securities reduced cash in 1H, but the balance sheet remains robust.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Deposits | JPY 2,320M | -14.0% vs. prior fiscal year-end |
| Cash and Cash Equivalents | JPY 2,036M | -13.6% vs. prior fiscal year-end |
| Shareholders' Equity | JPY 6,404M | +1.2% vs. prior fiscal year-end |
| Interest-Bearing Debt (Borrowings) | JPY 301M | -5.5% vs. prior fiscal year-end |
| └Current Portion of Long-Term Borrowings | JPY 25M | - |
| └Long-Term Borrowings | JPY 275M | - |
| Investment Securities | JPY 334M | +77.1% vs. prior fiscal year-end; purchases of JPY 151M |
| Goodwill | JPY 598M | -7.2% vs. prior fiscal year-end |
| Free CF | JPY 78M | Operating CF JPY 595M + investing CF -JPY 517M; our estimate |
| EBITDA | JPY 892M | Operating income + depreciation + goodwill amortization; our estimate; JPY 871M in prior-year period |
| Metric | Value | Notes |
|---|---|---|
| Net Debt/EBITDA | Net cash | Net cash of JPY 2,019M (cash and deposits − borrowings); our estimate |
| Debt/Equity | 0.05x | 0.05x at prior fiscal year-end; our estimate |
| Interest Coverage Ratio | 302.6x | Operating income ÷ interest expense; 350.9x in prior-year period; our estimate |
| Equity Ratio | 82.8% | 81.2% at prior fiscal year-end; company disclosure |
Disclosures Released Alongside The Earnings Announcement
Major Announcements During The Quarter
- 2026/08/14Announced 1Q results: revenue of JPY 1,255M (+4.1%), operating income of JPY 165M (-1.8%)
- 2026/09/18Renewed the shop area at flagship Anitouch Minatomirai, aiming to offset lower visitor numbers through stronger merchandise sales
- 2026/10/06Announced the opening date of Anitouch Kichijoji, kicking off 2H store network expansion
- 2026/11/09Announced the opening of Anitouch Kamakura Komachi, targeting a recovery in the Anitouch segment through expansion into a tourist location
Large-Shareholding Filings / Material Proposals Over The Past Year
None
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