COVER (5253) Q2 2026 earnings summary

Executive summary

• Revenue for the six months ended September 30, 2025, rose 27.2% year-over-year to ¥21,754 million, driven by strong performance in live events, trading card games, and licensing collaborations.

• Operating profit declined 20.9% year-over-year to ¥2,666 million due to increased upfront investments and inventory valuation losses, despite higher revenue.

• Net profit decreased 5.7% year-over-year to ¥1,999 million, reflecting lower margins and extraordinary losses.

• Revenue growth was led by Concerts/Events and Licensing/Collaborations, while Merchandising faced headwinds from North American tariffs and sales channel shifts.

• Operating income exceeded forecasts by about 10%, despite revenue falling short by 4% due to external factors and a temporary decrease in EC sales.

Financial highlights

• Gross profit for the interim period was ¥10,573 million, up from ¥9,083 million in the prior year.

• Operating margin declined due to higher selling, general, and administrative expenses, totaling ¥7,907 million.

• Extraordinary losses included a ¥450 million provision for foreign indirect taxes and impairment losses.

• Basic earnings per share for the period was ¥30.46, down from ¥34.21 year-over-year.

• Cash and cash equivalents at period-end were ¥13,056 million, up ¥1,558 million from March 31, 2025.

Outlook and guidance

• Full-year revenue forecast for fiscal year ending March 31, 2026, is ¥52,500 million, up 21.0% year-over-year.

• Operating profit and ordinary profit are both forecast at ¥8,200 million, with net profit projected at ¥5,700 million and basic EPS at ¥86.82.

• The company aims to catch up with its full-year plan in the second half through expanded events, TCG business, and licensing, as well as improvements in supply chain management and merchandising channels.

• Q3 is expected to benefit from increased content viewing during the winter holidays and new fan club initiatives.

• Medium-term targets are set at 100 billion yen in net sales and 25 billion yen in operating profit by FY2030.