Key Positives From The Results
Revenue came in at JPY 11.721B (+36.9% YoY) and operating income at JPY 792M (+257.7% YoY), both Q1 all-time records. The stabilization of new-generation game hardware supply and rush demand ahead of price revisions, combined with strength in pre-owned trading cards and hobby items, drove OPM sharply higher to 6.8% (+4.2pt YoY).
- New Game Sales:+126.5% YoY (more than doubled), driven overwhelmingly by new-generation hardware-related products
- Pre-Owned Trading Card Sales:+39.1% YoY; stable secondary market pricing and merchandise strategy focused on inventory turnover sustained growth in this core category
- SG&A Ratio:Declined 7.2pt from 35.1% to 27.9%, with scale effects from top-line growth absorbing cost increases
- TAYS Deployment:Surpassed 550 locations, advancing the build-out of a recurring-revenue base in B2B
- Share Buybacks In Q1:JPY 248M of treasury shares acquired; total payout ratio at 63.0% (based on guidance), signaling an enhanced shareholder return stance
Key Concerns From The Results
The new game mix share rose 9pt to 47.3%, pushing gross profit margin down 3.0pt from 37.7% to 34.7%. Rush demand for new-generation game hardware is largely one-off in nature, and the risk of payback in Q2 onward warrants attention.
- Gross Profit Margin At 34.7% (−3.0pt):Rising share of lower-margin new game products deteriorated the sales mix
- June Monthly Sales At 80% YoY:A sharp deceleration — new games at 52% and new trading cards also sluggish — raises questions about the sustainability of Q1 momentum
- Short-Term Borrowings Surged From JPY 1.5B To JPY 2.9B (+JPY 1.4B):Increased reliance on borrowings for working capital
- Net Assets Declined JPY 129M:Driven by JPY 320M in dividends and JPY 248M in share buybacks; equity ratio fell from 48.8% to 44.5%
- Full-Year Net Income Guidance Of JPY 800M Implies A −7.8% YoY Decline:Guidance left unchanged despite the strong Q1
Focus Areas / Items To Monitor Going Forward
- As indicated by the June monthly sales figure of 80% YoY, the extent to which payback from the new-generation game hardware rush demand weighs on earnings from Q2 onward. This will be a litmus test for the rationality of the full-year revenue plan of JPY 42.5B (+0.6%)
- Whether the second Taipei store opening planned for this autumn proceeds on schedule, and the timeline to profitability and scale of upfront investment for the overseas business
- How the EC business restructuring (consolidating onto Amazon and Yahoo! Auctions) following the shutdown of Furuichi Online impacts revenue and profits, and quantifying the logistics integration synergies with Santoku
- Outlook for new game sales from Q2 onward, given June monthly new game sales at 52% YoY
- Rationale for maintaining full-year guidance and management's view on the probability of an upward revision
- Countermeasures for the gross margin decline (−3.0pt) and specific initiatives to restore the pre-owned product mix
- Target investment amount and breakeven timeline for the second Taipei store
- Development progress on IoT-equipped proprietary vending machines and installation targets
- Revenue contribution from external TAYS sales and outlook for the rollout pace going forward
- Breakdown of uses for the JPY 1.4B increase in short-term borrowings and future borrowing policy
- Initial results of product diversification tests (character goods, general merchandise, etc.) and rollout plans for H2 and beyond
- Details of the ongoing collaboration with Suruga-ya following the transition from a capital-business alliance to a business alliance, and the impact on financial performance
- Store opening pace to achieve medium- to long-term targets (FY02/2029: revenue JPY 50B, operating income JPY 2.5B)
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 11.721B | +36.9% |
| Cost of Goods Sold | JPY 7.655B | +43.6% |
| Gross Profit | JPY 4.066B | +25.9% |
| Gross Profit Margin | 34.7% | −3.0pt |
| SG&A | JPY 3.273B | +8.9% |
| SG&A Ratio | 27.9% | −7.2pt |
| Operating Income | JPY 792M | +257.7% |
| Operating Income Margin | 6.8% | +4.2pt |
| Recurring Profit | JPY 816M | +309.5% |
| Net Income Before Tax (Quarterly) | JPY 808M | +306.2% |
| Net Income Attributable to Owners of Parent Company (Quarterly) | JPY 475M | +421.8% |
| EPS | JPY 7.49 | +420.1% |
| Comprehensive Income | JPY 424M | +377.4% |
The revenue surge was primarily driven by new-generation game hardware demand and rush buying ahead of price revisions. COGS growth (+43.6%) outpaced revenue growth (+36.9%), compressing gross margin, but revenue expansion far exceeded SG&A growth (+8.9%), resulting in a sharp improvement in OPM.
Performance By Business Segment
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Multi-Package Sales Business (Consolidated) | JPY 11.721B | +36.9% | JPY 792M | +257.7% | 6.8% |
- New Games: +126.5% YoY; explosive growth driven by stabilization of new-generation game hardware supply and rush demand ahead of price revisions
- Pre-Owned Trading Cards: +39.1% YoY; stable secondary market pricing, inventory turnover-focused merchandising, and cross-selling synergies with new products sustained growth in this flagship category
- Pre-Owned Games: +23.3% YoY; rebound from purchase deferrals ahead of new hardware launches in the prior year, with inbound tourism demand for retro games also contributing
- New Trading Cards: +22.4% YoY; expansion of bestselling titles and strengthened procurement through manufacturer partnerships proved effective
- Pre-Owned Hobby Items: +19.7% YoY; positioned as the top-priority product category, with enhanced buying efforts to capture inbound tourism demand
- Pre-Owned Books: −1.7% YoY; new mall-format stores do not carry books, and the ongoing impact of e-book adoption continues
Progress Versus Full-Year Guidance
Q1 revenue represents 27.6% progress toward the full-year plan of JPY 42.5B, well above the prior-year Q1 progress rate (JPY 8.561B / JPY 42.233B = 20.3%). However, this includes one-off tailwinds from new-generation hardware rush demand, and given the sharp deceleration in June monthly sales (80% YoY), confirmation of Q2 trends is needed before concluding the full-year plan will be exceeded. Operating income progress stands at an exceptionally high 49.5% against the full-year plan of JPY 1.6B.
| Item | Value (Q1) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 11.721B | JPY 42.5B | 27.6% |
| Operating Income | JPY 792M | JPY 1.6B | 49.5% |
| Recurring Profit | JPY 816M | JPY 1.6B | 51.0% |
| Net Income | JPY 475M | JPY 800M | 59.4% |
- Q4 (December–February) tends to generate the highest revenue due to the year-end/New Year sales season. This pattern holds on a QoQ basis over the past three years (FY02/2026 Q4: JPY 12.23B vs. Q1: JPY 8.56B)
- Q1 is typically the weakest quarter for revenue, but this fiscal year saw an unusually high level due to the new-generation hardware special demand
Changes To Guidance
No changes to full-year guidance. The full-year outlook announced on April 14, 2026 remains unchanged. Q1 operating income progress of 49.5% far exceeds historical norms; this is likely a cautious decision to hold guidance given the anticipated payback from rush demand in Q2 and beyond.
Commentary On Shareholder Returns
The FY02/2027 annual dividend forecast is JPY 4.00 (interim JPY 0.00, year-end JPY 4.00), down from the prior year's JPY 5.00 (ordinary dividend JPY 4.00 + special dividend JPY 1.00) due to the elimination of the special dividend. JPY 248M in treasury shares (1,852,000 shares) was acquired during Q1. Total dividends of JPY 256M + buybacks of JPY 248M = total shareholder returns of JPY 504M (total payout ratio of 63.0% against net income guidance of JPY 800M).
Financial Position
The increase in short-term borrowings expanded interest-bearing debt, and the equity ratio declined from 48.8% to 44.5%. Meanwhile, cash and deposits increased by JPY 202M, primarily to fund working capital needs associated with business expansion.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Total Assets | JPY 15.388B | +JPY 1.081B vs. prior FY-end |
| └ Total Current Assets | JPY 10.841B | +JPY 1.148B vs. prior FY-end |
| └ Total Non-Current Assets | JPY 4.546B | −JPY 67M vs. prior FY-end |
| Cash and Deposits | JPY 3.291B | +JPY 202M vs. prior FY-end |
| Merchandise | JPY 5.081B | +JPY 191M vs. prior FY-end |
| Interest-Bearing Debt | JPY 4.192B | +JPY 1.327B vs. prior FY-end |
| └ Short-Term Borrowings | JPY 2.9B | +JPY 1.4B vs. prior FY-end |
| └ Current Portion of Bonds | JPY 200M | Unchanged vs. prior FY-end |
| └ Current Portion of Long-Term Debt | JPY 235M | −JPY 516M vs. prior FY-end |
| └ Long-Term Debt | JPY 857M | +JPY 443M vs. prior FY-end |
| Net Assets | JPY 6.846B | −JPY 129M vs. prior FY-end |
| Equity Ratio | 44.5% | Down 4.3pt from 48.8% at prior FY-end |
| EBITDA | JPY 898M | Operating income JPY 792M + Depreciation JPY 106M |
News Released Alongside The Earnings Announcement
Major Announcements During The Quarter
- 2026/04/23Simultaneously grand-opened two Furuichi stores at AEON Mall Ibaraki and AEON Mall Chikushino, expanding mall-based locations in the Kansai and Kyushu regions Furuichi AEON Mall Ibaraki and Chikushino — Simultaneous Grand Opening on April 23, 2026
- 2026/05/19Dissolved the capital-business alliance with Suruga-ya and transitioned to a business alliance; acquired 1,852,000 Teitsuu shares (2.89%) held by Suruga-ya as treasury stock Notice Regarding Dissolution of Capital-Business Alliance with Suruga-ya and Transition to Business Alliance
- 2026/05/20Completed acquisition of 1,852,000 treasury shares for JPY 248M via ToSTNeT-3 off-auction trading Notice Regarding Results and Completion of Treasury Share Acquisition via ToSTNeT-3 Off-Auction Trading
- 2026/06/05May monthly sales surged to 166% YoY, driven by new games at 217% and strong pre-owned trading cards Notice Regarding May 2026 Monthly Sales Summary
- 2026/07/07June monthly sales decelerated to 80% YoY, with new games at 52% as the payback from the prior year's new-generation hardware launch materialized Notice Regarding June 2026 Monthly Sales Summary
Large-Shareholding Filings / Material Proposals Over The Past Year
No new large-shareholding reports or amendment filings targeting Teitsuu shares were identified during the relevant period. Note that Teitsuu, as a holder, filed multiple amendment reports for shares in TORICO <7138>, progressively reducing its stake from 19.25% to 4.30% (below 5%) in connection with the dissolution of their capital-business alliance.
None applicable
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