HOUSE OF ROSE Co.,Ltd.

Business Details

This segment centers on retail sales of cosmetics, bath products, and general merchandise at HOUSE OF ROSE directly-operated stores, along with e-commerce sales through the company-operated site and third-party malls. Its strength lies in consulting-style sales of skincare cosmetics through the company's proprietary "hand wash" customer service approach (touch-based service), and it is the core segment accounting for approximately 77.6% of consolidated net sales. The company is promoting diversification of its sales base through the establishment of single-ID integration (point program unification) and the acquisition of the MAMA BUTTER Brand.

Recent Overview

Operating loss widened due to accelerated closure of unprofitable stores and recording of MAMA BUTTER initial costs

In FY2026 (ending March 2026), net sales of the Directly-Operated Store Product Sales Business were ¥8,957 million (down 0.5% year on year), and the operating loss was ¥124 million (worsened from a loss of ¥116 million in the prior period). The main factors were accelerated closures of unprofitable stores, a decline in new customer acquisition due to revisions to sales promotion measures, the recording of ¥31 million in initial costs related to the MAMA BUTTER Brand acquisition, and increased personnel expenses due to wage hikes. On the other hand, the company-operated e-commerce site grew 2.6% year on year, and signs of improvement emerged, such as an increase in registered members due to single-ID integration and an increase in customers using both stores and e-commerce. Impairment losses of ¥46 million were recorded at 67 directly-operated stores.

Key Products

Growth Drivers

• Continued growth of the company-operated e-commerce site: new customer acquisition through LINE member linkage and expanded payment options, and an increase in customers using both stores and e-commerce
• Deepening of single-ID integration (point program unification): strengthening customer relationships with a view to integrating the membership system between directly-operated stores and the e-commerce business
• Enhancement of the "Suhada Migaki" brand value: rebuilding "touch-based service/hand wash" and establishing "exfoliation care" as a signature area, based on the three-year medium-term management plan
• Launch of new products and collaboration products: acquisition of new customers and enhancement of brand recognition through the "barrierise" skincare line, the renewal of the "Milcure" series, and other initiatives
• Full-scale operation of the MAMA BUTTER Brand: accelerating sales expansion as a wholesale and e-commerce brand following the completion of production system establishment
• Improvement of the earnings structure through cost ratio reduction from restrained discount measures and the elimination of unprofitable stores based on profit and loss criteria

Risks

• Shrinking sales scale due to a decrease in the number of stores: closures of unprofitable stores and closures of host locations continue, posing a structural risk that lowers all-store sales
• Pressure on earnings from rising personnel expenses: an increase in the personnel expense ratio due to wage increases including base pay raises pushes up SG&A expenses
• Decline in new customer numbers due to revisions to sales promotion measures: a short-term decline in customer acquisition affects directly-operated store sales
• Sluggish sales of the mainstay product (Body Smoother): difficulties continue in the e-commerce third-party mall channel
• Goodwill amortization burden related to the MAMA BUTTER Brand acquisition: amortization of the unamortized balance of ¥118 million will continue to pressure future earnings
• Ongoing risk of impairment losses: impairment losses of ¥46 million were recorded at 67 stores during the period, and additional losses may be recorded if unprofitable stores remain