WARC 2023 年 6 月 9 日
View from FY6/26Q1 results.
The FY6/26Q1 delivered better-than-expected results. In particular, the expansion of sales volume in the retail business drove growth in the marketing solution business, leading to a significant improvement in profitability. We want to firmly acknowledge that the flywheel is starting to pick up speed.
Despite the strong earnings, the stock market appears overly concerned about declining inbound demand from China. However, China accounts for only slightly over 5% of the company's sales at physical stores. We should focus more on the improving fundamentals.
For the FY6/26Q1, net sales were 18,442 million yen (+23% YoY) and operating profit was 1,039 million yen (+36% YoY). Results exceeded WARC expectations. Stage profits largely met the company's undisclosed first-half plan. While Q2 profits are projected to decline quarter-on-quarter due to strategic investments, performance was strong overall. This stems from the retail business's robust performance positively impacting the marketing solution business. WARC previously highlighted the momentum beginning to build across media, physical stores, and e-commerce, and this earnings report reflects that momentum in concrete figures.
However, the stock price has been weak since the earnings announcement. Possible factors include: (1) the stock had already risen before the announcement, so the strong results may have been partially priced in; (2) pessimism over the full-year plan being maintained despite strong 1Q progress; and (3) concerns about declining inbound demand. While factors (1) and (2) are unavoidable technical issues, factor (3) suggests a need to focus on the company's fundamentals. It's true that companies in this sector, including cosmetics manufacturers, seem to be reacting strongly to trends in the Chinese market, including inbound tourism. Recently, there are also concerns about reduced inbound demand due to deteriorating Japan-China relations. However, the company's dependence on China for sales at its physical stores is only slightly over 5%. It is important to recognize that the impact on overall performance is minimal.
The company operates media (@cosme), real stores (@cosme STORE), and ecommerce (@cosme SHOPPING), and we would like to reiterate that leveraging the lifestyle data generated from these platforms will enhance the company's future growth potential. The impact on business performance is also beginning to become apparent, as the appeal of user engagement in transactions with brands is proving successful.
However, compared to 16.7 million MAU for media, the number of monthly purchasers at stores is only 510,000, and the number of monthly purchasers on e-commerce is only 190,000. This gap can be seen as representing the potential for growth. We will continue to focus on how this gap will be closed through growth investments in the future.
Go Saito (WARC Inc. CFO)
3660 JP / TSE Prime / Industry: Household Necessities Stores, Specialised Information Sites
ir@warc.jp
Closing Price | 21/11/2025 | 458.000 |
Moving Average High Price | Last 1M | 458.136 |
Last 3M | 501.500 | |
Last 6M | 529.246 | |
Last 1Y | 661.000 | |
Low Price | Last 1Y | 381.000 |
Turnover | 21/11/2025 | 1,034,700 |
(Source) SPEEDA Unit : JPY
Market cap | 21/11/2025 (Local time) | 46,930Million |
Enterprise Value | LTM | 42,479Million |
PER | Latest FY | 19.6x |
LTM | 19.3x | |
Curt. Est. | 17.2x | |
PBR | LTM | 2.19x |
EV/Sales | Latest FY | 0.67x |
LTM | 0.59x | |
Curt. Est. | 0.51x | |
EV/EBITDA | Latest FY | 8.8x |
LTM | 7.7x | |
Curt. Est. | 7.2x | |
EV/Operating profit | Latest FY | 14.7x |
LTM | 12.3x | |
Curt. Est. | 11.2x |
(Source) SPEEDA Unit : JPY
25/11/2024 – 21/11/2025This report is for informational purposes only and is not intended as a solicitation or inducement to engage in investment activities, nor is it intended to provide opinions or judgments regarding investments or the other related matters.
This report was prepared at the request of the subject company, with information provided by the company through interviews, etc. However, the information, interpretation of data, credibility, hypotheses, conclusions, and all other content in this report is based on WARC's analysis, and the accuracy, safety, and validity of the information or opinions contained in this report are not guaranteed.
WARC assumes no responsibility for any costs or damages arising from the use of this report or information obtained from this report.
WARC does or may do business with companies covered in this report. Accordingly, investors should be aware that WARC may have conflicts of interest that could affect the objectivity of this report.
Financial ResultsRevenue EBITDA OP RP NP EPS DPS
(Y mil) （Y/y） (Y mil) （Y/y） (Y mil) （Y/y） (Y mil) （Y/y） (Y mil) （Y/y） (Yen) (Yen)
FY06/21 FY | Actual | 30,950 | 1.3% | 1,205 | 1269.3% | -604 | - | -795 | - | 379 | - 5.5 | 0.0 |
FY06/22 FY | Actual | 34,401 | 11.2% | 1,556 | 29.1% | -453 | - | -593 | - | -571 | - -7.4 | 0.0 |
FY06/23 FY | Actual | 42,890 | 24.7% | 2,935 | 88.6% | 817 | - | 410 | - | 275 | - 3.7 | 0.0 |
FY06/24 FY | Actual | 56,085 | 30.8% | 4,581 | 56.1% | 1,940 | 137.5% | 1,721 | 319.8% | 1,214 | 341.5% 15.7 | 0.0 |
FY06/25 FY | Actual | 68,768 | 22.6% | 5,596 | 22.2% | 3,164 | 63.1% | 3,310 | 92.3% | 2,327 | 91.7% 29.0 | 1.0 |
FY06/26 FY | Company plan | 83,000 | 20.7% | - | - | 3,800 | 20.1% | 3,800 | 14.8% | 2,650 | 13.9% 29.7 | 1.0 |
FY06/26 FY | WARC forecast | 82,997 | 20.7% | 5,613 | 0.3% | 3,984 | 25.9% | 4,169 | 25.9% | 2,781 | 19.5% 31.2 | 1.0 |
FY06/27 FY | WARC forecast | 91,132 | 9.8% | 6,716 | 19.6% | 4,572 | 14.7% | 4,781 | 14.7% | 3,189 | 14.7% 35.8 | 1.0 |
FY06/28 FY | WARC forecast | 97,390 | 6.9% | 7,785 | 15.9% | 5,200 | 13.7% | 5,433 | 13.7% | 3,624 | 13.7% 40.7 | 1.0 |
Source: Company data, WARC
FY6/26Q1 saw steady growth in both sales and profits. in particular, stage profits reached levels close to the company's first-half plan. This was primarily due to continued strong performance in the marketing solution business, coupled with robust cost control across the entire group. Sales volume in the retail business expanded, driving growth in sales promotion services. Additionally, this has positively impacted various solutions, including online advertising. This strong earnings report confirms that the flywheels of media, retail, and e-commerce are spinning steadily.
As 1H profit targets were largely achieved by the end of Q1, some may feel dissatisfied that no upward revision was made. This is because Q2 is expected to see a decrease in profit compared to Q1, due to anticipated expenses such as promotion costs for new real-world events like “Tokyo Beauty Week” (November) and “@cosme BEAUTY DAY” (December), as well as opening costs for “@cosme HONG KONG” (December).
In the retail business, store sales increased by 24.0% year-on-year and e-commerce sales rose by 26.4% year-on-year, maintaining the growth momentum from the previous quarter. Monthly sales per square meter of company-operated stores increased by 2.5%, slowing from the previous quarter's 8.8% growth but remaining solid. While some express concern about the impact of reduced inbound demand, particularly from China due to deteriorating Japan-China relations, it is important to recognize that Chinese sales account for only slightly over 5% of total store sales. Therefore, even if affected, the overall impact would be minimal.
On the profit side, attention should be paid to how the growth of the marketing solution business is gradually increasing the marginal profit margin. While the gross profit margin declined significantly in Q2 of FY6/25 due to point rebate campaigns during sales events, it has since steadily recovered to a solid level. Although the growth of the relatively lower-margin retail business tends to somewhat limit the improvement in gross profit margin, the synergistic effect between the marketing solution business and the momentum of both store sales and e-commerce sales is driving the upward trend in the gross profit margin. We will continue to monitor the trajectory of this metric going forward.
Marginal profit
6,000
4,000
2,000
0
32.0%
1Q 2Q 3Q 4Q FY06/24 | 1Q 2Q 3Q 4Q FY06/25 F | 1Q Y06/2 | |||||
30.0%
28.0%
26.0%
24.0%
6
Marginal profit (LHD: Y mil) % of sales (RHD: %)
Source: Company data, WARC
Source: Company data
Regarding global business, note that opening costs for “@cosme HONG KONG,” scheduled to open on December 5, have been recorded. To date, ¥12 million for FY6/25Q3, ¥117 million for FY6/25Q4, and ¥104 million for FY6/26Q1 have been recorded, with a corresponding amount expected to be recorded in Q2.
@cosme HONG KONG will be a flagship store following TOKYO, OSAKA, and NAGOYA, marking the first flagship store overseas. Located in Tsim Sha Tsui, Hong Kong, it will span three floors with a sales floor area of 1,298 square meters, offering a selection of over 500 brands. The sales floor area is comparable in scale to Tokyo's 1,380 sq.m. In Hong Kong, the company plans to link the Hong Kong version of the @cosme app with the physical store to provide an immersive shopping experience.
The store layout incorporates various innovations, such as THE BEST COSMETICS BUILDING, which brings together all @cosme Best Cosmetics Award-winning products, and sections featuring trends selected from various Asian cities.
Source: Company data
(Y mil)FY6/25 | FY6/26 | Comments | |||||
1Q | 2Q | 3Q | 4Q | 1Q | |||
Net sales | 15,038 | 18,034 | 16,813 | 18,883 | 18,442 | Domestic marketing solution and retail businesses are performing well. | |
Gross profit | 6,778 | 7,534 | 7,266 | 8,056 | 8,050 | ||
% of Sales | 45.1% | 41.8% | 43.2% | 42.7% | 43.7% | ||
SG&A | 6,016 | 6,801 | 6,416 | 7,237 | 7,011 | Covering pre-opening expenses for the Hong Kong flagship store with increased revenue. | |
% of Sales | 40.0% | 37.7% | 38.2% | 38.3% | 38.0% | ||
Operateing profit | 762 | 733 | 850 | 819 | 1,039 | Exceeded company plan (Undisclosed). Q2 is packed with events, with earnings expected to decline compared to Q1 | |
% of Sales | 5.1% | 4.1% | 5.1% | 4.3% | 5.6% | ||
Ordinary income | 839 | 749 | 946 | 776 | 1,050 | ||
% of Sales | 5.6% | 4.2% | 5.6% | 4.1% | 5.7% | ||
Net income | 603 | 497 | 661 | 566 | 648 | ||
% of Sales | 4.0% | 2.8% | 3.9% | 3.0% | 3.5% | ||
Source : Company data, WARC
(Y mil)FY6/25 | FY6/26 | Comments | |||||
1Q | 2Q | 3Q | 4Q | 1Q | |||
Net sales | 15,038 | 18,034 | 16,813 | 18,883 | 18,442 | ||
%YoY | 20.8% | 22.9% | 21.3% | 25.0% | 22.6% | ||
Marketing solution | 2,636 | 2,875 | 2,757 | 3,041 | 3,330 | Drivenby growth in the retail business, sales promotion initiatives leveraging both e-commerce and physical stores performed well. | |
%YoY | 16.5% | 20.1% | 23.0% | 30.0% | 26.3% | ||
Retail | 11,372 | 14,217 | 13,136 | 14,869 | 14,253 | Monthly sales per square foot at company-owned stores increased by 2.5% yoy. The new @cosme NAGOYA store also contributed. E-commerce saw success in acquiring new customers through platform integration. | |
%YoY | 28.7% | 27.7% | 23.8% | 27.5% | 25.3% | ||
Global | 999 | 1,057 | 996 | 1,131 | 1,006 | The recovery of China's cross-border e-commerce continues | |
%YoY | -9.3% | 4.9% | 21.0% | 12.5% | 0.7% | ||
Other | 398 | 414 | 339 | 375 | 368 | BLOOMBOX ended (December 2024), resulting in reduced revenue and profits, but progress was as expected | |
%YoY | -9.8% | -6.1% | -20.8% | -2.8% | -7.5% | ||
Intersegment sales and transfers | -366 | -530 | -415 | -533 | -515 | ||
Segment profit | 762 | 733 | 850 | 819 | 1,039 | ||
%YoY | 107.1% | 51.8% | 40.7% | 68.9% | 36.4% | ||
% of Sales | 5.1% | 4.1% | 5.1% | 4.3% | 5.6% | ||
Marketing solution | 662 | 761 | 642 | 757 | 972 | Business models with high marginal profit rates drive growth | |
%YoY | 36.8% | 64.0% | 134.3% | 91.6% | 46.8% | ||
% of Sales | 25.1% | 26.5% | 23.3% | 24.9% | 29.2% | ||
Retail | 714 | 590 | 845 | 966 | 860 | Margins decreased by 0.3 percentage points due to new store costs and increased labor expenses | |
%YoY | 38.1% | 14.6% | -6.2% | 37.4% | 20.4% | ||
% of Sales | 6.3% | 4.1% | 6.4% | 6.5% | 6.0% | ||
Global | -14 | -9 | -47 | -106 | -150 | In addition to the Y104 million in pre-opening costs for the Hong Kong flagship store, the impact of store closures in February also | |
%YoY | - | - | - | - | - | ||
% of Sales | - | - | - | - | - | ||
Other | 61 | 66 | 36 | 25 | 13 | In addition to the discontinuation of BLOOMBOX, upfront costs for the supplement business were recorded | |
%YoY | 1.7% | 57.1% | -62.9% | -52.8% | -78.7% | ||
% of Sales | 15.3% | 15.9% | 10.6% | 6.7% | 3.5% | ||
Adjustment | -662 | -672 | -628 | -823 | -656 | Number of employees at September 2025: 1,868 | |
Source : Company data, WARC | |||||||
akdown of SG&A> | (Y mil) | ||||||
FY6/25 | FY6/26 | Comments | |||||
1Q | 2Q | 3Q | 4Q | 1Q | |||
nnel-related expenses | 2,167 | 2,143 | 2,144 | 2,289 | 2,471 | Increased labor costs due to the opening of the Nagoya flagship store | |
% of Sales | 14.4% | 11.9% | 12.8% | 12.1% | 13.4% | ||
m-related expenses | 497 | 550 | 587 | 656 | 602 | Core system enhancement for marketing solution and e-commerce business | |
% of Sales | 3.3% | 3.0% | 3.5% | 3.5% | 3.3% | ||
handise sales^related expenses | 2,063 | 2,528 | 2,313 | 2,557 | 2,650 | ||
% of Sales | 13.7% | 14.0% | 13.8% | 13.5% | 14.4% | ||
s | 1,290 | 1,578 | 1,371 | 1,736 | 1,287 | Pre-opening expenses for Hong Kong flagship store: Y104 million | |
% of Sales | 8.6% | 8.8% | 8.2% | 9.2% | 7.0% | ||
Source : Company data, WARC | |||||||
Profit and loss statement | (Y mil) | |||||||
FY06/23 | FY06/24 | FY06/25 | FY06/26 | FY06/27 | FY06/28 | |||
Actual | Actual | Forecast | Forecast | Forecast | Forecast | |||
Net sales | 42,890 | 56,085 | 68,768 | 82,997 | 91,132 | 97,390 | Domestic business continues to drive growth | |
%YoY | 24.7% | 30.8% | 22.6% | 20.7% | 9.8% | 6.9% | ||
Gross profit | 19,171 | 24,645 | 29,634 | 36,453 | 40,098 | 42,852 | ||
%YoY | 28.6% | 28.6% | 20.2% | 23.0% | 10.0% | 6.9% | ||
% of Sales | 44.7% | 43.9% | 43.1% | 43.9% | 44.0% | 44.0% | ||
SG&A | 18,353 | 22,705 | 26,470 | 32,469 | 35,526 | 37,651 | Growth investment will continue, but SG&A ratio is expected to | |
%YoY | 12.7% | 23.7% | 16.6% | 22.7% | 9.4% | 6.0% | decline due to revenue growth. | |
% of Sales | 42.8% | 40.5% | 38.5% | 39.1% | 39.0% | 38.7% | ||
EBITDA | 2,935 | 4,581 | 5,596 | 5,613 | 6,716 | 7,785 | ||
%YoY | 6.8% | 56.1% | 22.2% | 0.3% | 19.6% | 15.9% | ||
% of Sales | 6.8% | 8.2% | 8.1% | 6.8% | 7.4% | 8.0% | ||
Operating profit | 817 | 1,940 | 3,164 | 3,984 | 4,572 | 5,200 | ||
%YoY | - | 137.5% | 63.1% | 25.9% | 14.7% | 13.7% | ||
% of Sales | 1.9% | 3.5% | 4.6% | 4.8% | 5.0% | 5.3% | ||
Ordinary income | 410 | 1,721 | 3,310 | 4,169 | 4,781 | 5,433 | ||
%YoY | - | 319.8% | 92.3% | 25.9% | 14.7% | 13.7% | ||
% of Sales | 1.0% | 3.1% | 4.8% | 5.0% | 5.2% | 5.6% | ||
Net income | 275 | 1,214 | 2,327 | 2,781 | 3,189 | 3,624 | ||
%YoY | - | 341.5% | 91.7% | 19.5% | 14.7% | 13.7% | ||
% of Sales | 0.6% | 2.2% | 3.4% | 3.4% | 3.5% | 3.7% | ||
Source : Company data, WARC | ||||||||
Balance sheet | （百万円） | |||||||
FY06/23 | FY06/24 | FY06/25 | FY06/26 | FY06/27 | FY06/28 | |||
BPS | 15,231 | 16,484 | 21,041 | 21,592 | 23,562 | 25,950 | ||
- | 6,723 | 5,762 | 7,224 | 9,480 | 10,269 | 11,745 | ||
- | 4,149 | 4,646 | 5,535 | 6,680 | 7,335 | 7,839 | ||
- | 2,945 | 4,217 | 6,415 | 4,342 | 4,761 | 5,088 | ||
- | 1,414 | 1,859 | 1,867 | 1,090 | 1,197 | 1,279 | ||
Bakance sheet | 9,070 | 11,656 | 13,560 | 13,121 | 14,498 | 15,650 | ||
Current assets | 1,588 | 1,762 | 3,589 | 2,520 | 3,333 | 3,998 | ||
- | 3,849 | 3,572 | 3,630 | 4,259 | 4,823 | 5,310 | ||
- | 3,632 | 6,322 | 6,342 | 6,342 | 6,342 | 6,342 | ||
- | 24,301 | 28,141 | 34,601 | 34,713 | 38,060 | 41,600 | ||
- | 6,371 | 8,237 | 12,692 | 11,799 | 12,831 | 13,625 | ||
Deffered tax assets | 2,043 | 2,711 | 3,409 | 4,114 | 4,518 | 4,828 | ||
Others | 1,055 | 1,208 | 3,698 | 1,000 | 1,000 | 1,000 | ||
- | 698 | 819 | 1,020 | 1,231 | 1,352 | 1,445 | ||
- | 2,575 | 3,499 | 4,565 | 5,454 | 5,962 | 6,353 | ||
- | 7,240 | 7,717 | 4,902 | 3,215 | 2,431 | 1,643 | ||
Advances received | 6,906 | 7,185 | 3,857 | 3,057 | 2,257 | 1,457 | ||
Other current liabilities | 334 | 0 | 1,045 | 158 | 174 | 186 | ||
- | 9,038 | 9,607 | 14,858 | 17,550 | 20,649 | 24,184 | ||
- | 10,690 | 12,187 | 17,007 | 19,699 | 22,798 | 26,333 | ||
- | 24,301 | 28,141 | 34,601 | 34,713 | 38,060 | 41,600 | ||
Cash flow statement | FY06/23 | FY01/00 | FY06/25 | FY06/26 | FY06/27 | FY06/28 | （百万円） | |
Operating CF | 2,942 | 3,336 | 3,139 | 6,666 | 5,080 | 6,000 | ||
Investing CF | -1,247 | -4,569 | -2,658 | -3,098 | -3,402 | -3,635 | ||
Financing CF | -612 | 160 | 1,012 | -1,287 | -889 | -889 | ||
Proceeds from issuance of b | -14 | 102 | -81 | 0 | 0 | 0 | ||
Redemption of bonds | 1,069 | -972 | 1,412 | 2,281 | 789 | 1,476 | ||
- | 6,759 | 5,787 | 7,199 | 9,480 | 10,269 | 11,745 | ||
Source : Company data, WARC | ||||||||