■Earnings Forecast

1. Earnings forecast for the fiscal year ending 2025/2

Regarding earnings forecasts for the fiscal year ending 2025/2, SFP Holdings (3198) basically anticipates an increase in sales of 30,000 million yen, up 3.2% from the previous fiscal year, operating income of 2,100 million yen, an increase of 3.6% from the same period, ordinary profit of 2,300 million yen, and net income attributable to parent company shareholders of a 13.4% decrease of 1,500 million yen, excluding net income affected by increased tax burdens.

As for sales, as inbound demand continues to be strong, the growth of existing stores and stores that opened in the previous fiscal year will contribute to an increase in sales. As for the number of stores, 7 directly managed stores are scheduled to open and 2 stores to close, and a net increase of 5 stores is expected compared to the end of the previous fiscal year.

In terms of profit and loss, in addition to labor costs due to active recruitment and wage increases, etc., and an increase in utility costs (electricity/gas costs) associated with the termination of subsidies, etc., the occurrence of one-time costs related to opening new stores, and active investment for medium-term growth, etc., it is expected that an increase in profit will be secured due to a rise in sales.

2. Our view

At our company, although it is necessary to continue to pay attention to uncertain economic conditions, etc., we evaluate that the company's earnings forecasts are reasonable. Strengthening the system for growth from the 2026/2 fiscal year onwards is prioritized, and growth in business performance is expected to moderate once, but there is also a possibility that 1) the capture of strong inbound demand and 2) a recovery in the number of customers due to increased business hours, etc. will be factors that will improve business results. In particular, for 1), we are also working on strengthening marketing and product development (high price range) for visitors to Japan, and we would like to pay attention to its trends and effects as an opportunity for further growth. Establishing a business infrastructure to support future growth, such as strengthening human capital including recruitment and education, and promoting DX, etc., and transformation of operations are also noteworthy points.

(Written by FISCO Visiting Analyst Ikuo Shibata)