Nack (9788) announced on the 11th its consolidated financial results for the second quarter of the fiscal year ending March 2025 (April-September 2024). Revenue increased by 7.8% year-on-year to 27.836 billion yen, operating profit increased by 25.3% to 0.763 billion yen, ordinary profit increased by 9.6% to 0.755 billion yen, and net income attributable to the parent company's shareholders decreased by 61.6% to 0.107 billion yen.

Revenue for the Kurikura business increased by 0.5% year-on-year to 7.803 billion yen, while operating profit decreased by 4.4% to 0.87 billion yen. In the directly operated sectors, the number of customers has increased compared to the same period last year. In the home delivery water "Kurikura," the customer acquisition through event sales has been progressing smoothly, and the measures to prevent cancellations through the proposal of additional products have been effective, leading to a decrease in the cancellation rate. Additionally, in the water server "Feel Free," aggressive WEB advertising and strengthened sales activities in response to increased market demand has resulted in a rise in the number of customers, with revenue increasing compared to the same period last year. On the other hand, sales of the hypochlorous acid water solution "ZiACO" have decreased compared to the same period last year due to an increase in cancellations from customers who used it as a measure against infectious diseases. As a result, the revenue decrease of "ZiACO" was offset by the increase in rental fees for the water server, leading to an overall revenue level for the directly operated sector that is roughly the same (slight increase) compared to the same period last year. In the franchised stores sector, while the consumption of bottles per customer has increased and the cancellation rate has decreased compared to the same period last year, the revenue has remained at approximately the same level (slight decrease) due to a reduction in the number of customers. In terms of profit and loss, concentrated prior investments for customer acquisition of the small-sized water server "Putio" increased sales promotion costs, resulting in a decline in operating profit compared to the same period last year.

Revenue from the rental business increased by 1.8% to 8.87 billion yen, while operating profit decreased by 8.1% to 0.742 billion yen. In the core Duskin business, the revenue increased compared to the same period last year due to a decrease in cancellation rates in the Dust Control sector and strong sales of additional products. In the Care Services sector, revenue increased compared to the same period last year due to the expansion of store openings based on a capital and business partnership with Duskin, along with a price revision in the "Service Master" business, offering professional cleaning services, and the "Merry Maid" business, providing housekeeping services, conducted by the Duskin franchise headquarters in April 2024. In the Health Rent sector, regular customer numbers increased due to business expansion through new store openings and business transfers, leading to increased revenue compared to the same period last year. Consequently, the overall revenue of the Duskin business increased compared to the same period last year. In the Wiz business, which primarily offers pest control devices called "With," increased customer numbers due to sales campaigns and successful cross-selling of additional products to existing customers, resulted in increased revenue compared to the same period last year. In the Ernest sector, which provides regular cleaning services for corporations, promoting activities aimed at lodging facilities such as bed-making due to increased inbound demand led to increased regular revenue. Meanwhile, the termination of the water border control support project implemented by the Ministry of Health, Labor, and Welfare, which increased during the COVID-19 pandemic, caused a decrease in revenue compared to the same period last year. Canz, which became a subsidiary in June last year and conducts restoration work for long term rentals, is expanding order numbers by coordinating with the Duskin corporate sales department. In terms of profit and loss, sales management costs increased due to decreased sales at Ernest and new store openings in the Duskin business, adding sales management systems in the Care Services sector, resulting in a decrease in operating profit compared to the same period last year.

Revenue from the construction consulting business decreased by 11.1% to 2.345 billion yen, with an operating loss of 0.065 billion yen (compared to a loss of 0.204 billion yen in the same period last year). In the consulting sector, the repayment of COVID-19 loans has initiated a reduction in new housing construction numbers, worsening the financial situation of local contractors, with no signs of improvement. As a result, investment willingness among local contractors regarding business improvement has decreased, leading to a decline in sales of the company’s know-how products, resulting in roughly the same revenue level (slight decline) compared to the same period last year. In the Nack House Partners, the smart energy business dealing with installation and sales of energy-saving related materials has shifted from wholesale to contracting installations, resulting in decreased revenue from wholesale. Moreover, reduced completion numbers in contracting materials for new homes have caused a decline in revenue compared to the same period last year. In the housing network business, the Ace Home brand, which operates home franchises, experienced reduced revenue compared to the same period last year due to decreased frame construction numbers among franchise members. In terms of profit and loss, despite decreased overall revenue, operating loss was reduced year-on-year due to the suppression of sales promotion and operational outsourcing costs in the consulting sector.

Revenue from the residential business increased by 53.2% to 5.334 billion yen, with an operating loss of 0.196 billion yen (compared to a loss of 0.245 billion yen in the same period last year). In KDI, in response to concerns about rising prices and increasing interest rates leading to decreased consumer sentiment, adjustments in selling prices and promotional measures resulted in an increase in sales units, significantly increasing revenue compared to the same period last year. At J-Wood, increased sales from the sale of built houses led to a revenue increase compared to the same period last year. Additionally, in May 2024, the company made Shuwa Juken, which specializes in the construction contracting of new detached houses in the Tohoku region, a subsidiary, and is now registering profit and loss from this middle consolidated accounting period. In terms of profit and loss, at J-Wood, operating loss has decreased due to revenue increase combined with efficiency improvements from fixed cost reviews. In KDI, revenue increase has led to a significant rise in operating profit compared to the same period last year. As a result, the overall operating loss in the residential business has decreased year-on-year.

The sales revenue of the beauty and health business increased by 9.1% year-on-year to 3.556 billion yen, and the operating profit surged by 185.3% to 0.133 billion yen. At JIMOS, while sales of natural cosmetic brands "Coyori" and "Morita Tofu" decreased due to the commodification of cosmetics, the sales of skincare products that utilize fine bubbles from the main brand "MACCHIA LABEL" and hair care items from "SINN PURETÉ" showed steady growth, resulting in overall sales at JIMOS maintaining the same level (slight increase) compared to the same period last year. At Belle Air, sales volume decreased as members aged, leading to sales at the same level (slight decrease) year-on-year. At Upsale, amidst the procurement issues due to a shortage of hair care products, efforts were made to enhance procurement by increasing the variety of handled products, but it was insufficient, and further intensified price competition in EC malls led to a decrease in sales compared to the same period last year. At Treme, with the recovery of the cosmetics market, orders from existing customers increased, and as repeat sales remained stable, sales were at the same level (slight increase) compared to the same period last year. Additionally, TOMOE Wine and Spirits, which was made a subsidiary in the previous period and focuses on the import and sale of alcoholic beverages primarily centered on wine, is leveraging group synergy by concentrating on sales through the EC operated by Upsale in addition to traditional wholesale sales, thus aiming to expand sales. In terms of profit and loss, TOMOE Wine and Spirits recorded a loss due to the time lag in passing on the increased procurement prices resulting from the depreciation of the yen to trading prices. On the other hand, JIMOS improved the efficiency of promotional expenses and compressed costs, which increased profits, leading to a significant increase in the overall operating profit of the beauty and health business compared to the same period last year.

The consolidated financial estimates for the fiscal year ending March 2025 are maintained with sales revenue projected to increase by 20.3% year-on-year to 65.5 billion yen, operating profit to increase by 74.1% to 4 billion yen, ordinary profit to increase by 67.3% to 4 billion yen, and net income attributable to parent company shareholders to increase by 77.5% to 2.55 billion yen.