STEP CO.,LTD.

Business Details

STEP Co., Ltd. is a company specializing in cram schools (juku), concentrating its operations within Kanagawa Prefecture. It operates a high school entrance exam course (for elementary school 5th grade through junior high school 3rd year students; the Elementary/Junior High Division), a university entrance exam course (for 1st through 3rd year high school students; the High School Division), and after-school childcare services (STEP Kids). Under the motto of lessons that are "enjoyable and also build ability," the company has maintained the No. 1 track record for admissions to top public high schools in the prefecture. For the interim period of FY2026 (ending September 2026) (October 2025 to March 2026), net sales were ¥8,356 million (up 2.4% year on year), and operating profit was ¥2,380 million (up 1.2% year on year). The full-year net sales forecast is ¥16,494 million (up 4.1% from the prior fiscal year).

Recent Overview

Admissions track record renewed to a record high level, with steady growth in both student enrollment and net sales.

In the interim period of FY2026 (ending March 2026), the company achieved higher sales and profit, with net sales of ¥8,356 million (up 2.4% year on year) and interim net profit of ¥1,697 million (up 2.7% year on year). The company achieved the No. 1 ranking by number of successful applicants among cram schools at all 8 of Kanagawa Prefecture's designated academic achievement priority high schools for the first time, enhancing brand strength. The number of successful applicants to "Tokyo Ikka" also reached a record high of 69. The Kawasaki School opened in March, with the Tomioka School scheduled to open in July. In investing activities, the company placed ¥1,000 million in time deposits and acquired ¥500 million in investment securities, resulting in cash and cash equivalents of ¥6,320 million, down 35.4% year on year. There has been no change to the full-year earnings forecast, which remains at net sales of ¥16,494 million and operating profit of ¥3,942 million.

Key Products

Growth Drivers

• Achieved the No. 1 ranking by number of successful applicants among cram schools at all 8 of Kanagawa Prefecture's designated academic achievement priority high schools for the first time, enhancing brand strength
• Average student count during the period increased 2.6% year on year, driven by improved occupancy rates at existing schools and the addition of new classes
• Expansion of student enrollment through two new schools: the Kawasaki School (opened in March) and the Tomioka School (scheduled to open in July)
• In the High School Division, the number of successful applicants to "Tokyo Ikka" reached a record high of 69, enhancing the reputation of University Entrance Exam STEP
• The number of students in the after-school childcare division (STEP Kids) reached a record high of 661, with expansion to a 6-classroom structure
• Continued dominant expansion into the Kawasaki City and eastern/southern Yokohama areas offers substantial room for medium- to long-term growth in student enrollment

Risks

• A sense of stagnation has emerged in student recruitment for junior high school students in the western and central areas of the prefecture, where the declining birthrate is progressing more rapidly, widening regional disparities
• Selling, general and administrative expenses increased 9.1% year on year (from ¥454 million to ¥496 million), posing a risk of pressure on profit margins
• The policy of restraining new school openings may result in more moderate short-term sales growth
• Network formation in the Kawasaki City and eastern/southern Yokohama areas is still in progress, posing a risk of intensifying competition with rival companies
• Cash and cash equivalents decreased 35.4% year on year due to investing cash flow items (¥1,000 million placed in time deposits, ¥500 million in acquisition of investment securities)
• Increase in financing cash flow due to treasury stock acquisition (¥671 million spent during the interim period) and dividend payments (¥707 million)