AB&Company Co., Ltd.

Business Details

Consolidated subsidiaries such as Loines Co., Ltd., Puzzle Co., Ltd., and agir Co., Ltd. operate directly operated beauty salons nationwide, providing beauty services. The business achieves flexible working arrangements for stylists through an outsourcing (independent contractor) model, securing compensation on a fully commission-based basis. By centering operations on suburban single-story stores and urban aerial (upper-floor) stores, the segment suppresses fixed rent costs, and maintains competitiveness by combining this with efficient customer acquisition leveraging HOT PEPPER Beauty. In the prior fiscal year, the company executed M&A of three beauty salon operating companies, substantially expanding the number of stores and beauty service revenue.

Recent Overview

M&A effects drove revenue up 20.6% year on year, turning segment loss into a profit of ¥271 million.

In the first half of FY2026 (ending March 2026) [November 2025 to April 2026], the increase in store count resulting from the M&A of three beauty salon operating companies executed in the prior fiscal year contributed to revenue of ¥9,060 million (up 20.6% year on year). Segment profit/loss improved substantially from a loss of ¥20 million in the prior first half to a profit of ¥271 million. Additionally, due to a change in accounting estimates (review of the useful lives of tangible fixed assets and the lease terms of right-of-use assets), depreciation expense decreased by ¥144 million, with operating profit increasing by the same amount. As a subsequent event, on May 29, 2026, the company acquired all shares of RIN Beauty Co., Ltd. (5 directly operated stores) for ¥350 million, making it a wholly owned subsidiary.

Key Products

Growth Drivers

• Increase in store count and expansion of beauty service revenue driven by the M&A of three beauty salon operating companies executed in the prior fiscal year (first-half external revenue up 20.6% year on year)
• Subsequent event: further expansion of the store network through making RIN Beauty Co., Ltd. (5 directly operated stores) a wholly owned subsidiary (acquisition cost of ¥350 million, acquired May 29, 2026)
• Continued opening of new directly operated stores (expansion from 243 stores at end of October 2021 to 447 stores at end of October 2025)
• Rising trend in average customer spending (from ¥5,763 in FY2023 (ending October 2023) to ¥6,171 in FY2025 (ending October 2025))
• Efficient customer acquisition leveraging HOT PEPPER Beauty combined with fixed cost suppression through suburban and aerial store formats
• Stylist recruitment through the outsourcing model and strengthened referral-based hiring

Risks

• Risk that persistently elevated labor costs, raw material costs, and energy costs due to inflation will pressure segment profitability (the segment fell into a segment loss of △¥20 million in the prior fiscal year)
• Slight downward trend in the number of customers per stylist (directly operated stores: from 109 in FY2023 (ending October 2023) to 103 in FY2025 (ending October 2025))
• Risk of impairment of goodwill and intangible assets (an impairment loss of ¥35 million was recorded in FY2025 (ending October 2025))
• Expansion of financial burden accompanying increases in borrowings and lease liabilities due to M&A (lease liabilities increased by ¥1,784 million due to a change in accounting estimates)
• Downward trend in the number of customers per stylist accompanying an increase in suburban store openings (suburban stores have shorter average working hours, resulting in lower KPIs)
• The reduction in depreciation expense resulting from changes in accounting estimates (extension of useful lives and lease terms) is a temporary effect, and an increase in interest expense (up ¥18 million) is pressuring pre-tax profit