3542.T

• Overall Financial Performance

  • For the cumulative first three quarters of the 2026 March fiscal year, total company revenue hit 12.745 billion yen (113.4% year-over-year), and total operating profit hit 776 million yen (153.0% year-over-year).
  • Third quarter standalone (October-December 2025) total revenue was 4.456 billion yen (108.3% year-over-year), and third quarter standalone operating profit was 333 million yen (156.9% year-over-year), marking all-time record highs for both revenue and operating profit on a standalone quarterly basis.
  • The balance sheet has no major fluctuations, and the company maintains its zero-debt operating model with sufficient capital capacity for future physical store expansion plans.
  • The company completed sustainability initiatives including donating furniture used during photoshoots to facilities in Fukuoka Prefecture and launching new sustainable products such as lightweight, easy-to-carry heater sheets.

• LOWYA Business Operations

  • LOWYA opened 3 new physical stores during the quarter, bringing the total store count to 13 as of the end of December 2025. The newly opened stores include LOWYA Lalaport Shin-Misato (Saitama), LOWYA Aeon Mall Fukuoka (Fukuoka, the second store in Fukuoka), and LOWYA Shibuya Miyamasuzaka (Tokyo, ~200 tsubo in size).
  • Key user metrics show strong growth: LOWYA flagship store membership exceeded 2 million users, with 76% of members in the 20-39 age group. The gender split is 37% male and 63% female, with a slight recent increase in male members. The LOWYA flagship app reached 1.95 million downloads as of December end, Instagram followers hit 1.35 million (surpassing 1.4 million by January 2026), and the おくROOM 3D furniture arrangement simulation app reached 750,000 downloads just over one year after launch.
  • Product development focuses on trend-forward, design-focused private label products, with a core competitive advantage of direct in-house product development overseas (no intermediate trading companies) that enables affordable pricing. New products launched in the quarter include a 3-seat sofa priced at 79,990 yen, mid-century style furniture series, and soup makers.
  • The おくROOM app added a new feature that supports editing for irregular polygonal rooms (in response to user requests, expanding from the original only square single-room simulation capability). A VR experience corner for おくROOM using Apple Vision Pro was launched at the new Shibuya Miyamasuzaka store, allowing customers to view their custom room designs in an immersive, true-to-life VR space. The app also includes an AI automatic coordination function that generates unlimited custom furniture arrangement recommendations based on user-input room size, budget, and style preferences.
  • The company's accelerated physical store expansion led to widespread media coverage, including features on WBS, シューイチ, and other major media outlets tied to the Shibuya store opening. Limited period advertisements ran on TVer and in taxis through March 2026 to promote the new Shibuya store, and these advertising costs account for the slight increase in the quarterly SG&A rate.
  • The OMO integrated online-offline model is more cost efficient than relying solely on web advertising, allowing the company to grow sales while keeping SG&A rates contained. Physical stores also support gross margin improvement due to customer take-home demand, which increases profitability.
  • Confirmed future physical store opening plans include: LOWYA Lalaport Fujimi (April 2026), LOWYA Grand Tree Musashikosugi (April 2026), LOWYA Aeon Mall Kashihara (Nara, June 2026, ~600 tsubo, the company's first large-format store trial), and a planned ~300 tsubo large-format store LOWYA Aeon Mall Chikushino in Fukuoka for the next fiscal year.

• DOKODEMO Business Operations

  • The business continues to face headwinds from the repeal of the US de minimis rule, which has led to suspended US shipments and an overall decline in GMV and revenue. There have been no major changes to regional GMV share, with Taiwan retaining an 80% share of total GMV.

• Full year 2026 March fiscal year guidance has been upwardly revised: full year revenue is revised to 18 billion yen, an increase of 500 million yen from the initial plan. Full year operating profit is revised to 1.25 billion yen, an increase of 150 million yen from the initial plan of 1.1 billion yen. Revised full year ordinary profit is 1.26 billion yen, revised full year net income is 756 million yen, and revised EPS is 71.9 yen. Management notes that there is possibility of even stronger results in March (the final month of the fiscal year, which is the largest sales driver for the heavily back-loaded full year sales pattern), but the revision is based on current performance as of the third quarter.
• The company revised its shareholder return policy: the previous policy used a 2% DOE target as the base for shareholder returns, and the new policy adds a 20% payout ratio target, with the higher of the two values used as the base for dividend calculations. This change reflects management's view that yen-based headwinds have largely been resolved, and the company has established a clear path for stable future growth via increased revenue and profit.
• Full year dividend guidance is upwardly revised from the initial 12 yen per share to 15 yen per share, representing a 4 yen per share increase from the prior fiscal year's 11 yen per share dividend.
• The existing shareholder benefit program remains unchanged: the company will continue to offer a 5,000 yen discount coupon usable at the LOWYA flagship online store and all physical LOWYA stores.

1. LOWYA Segment: Cumulative revenue for the first three quarters was 12.486 billion yen, reaching an all-time high for both revenue and operating profit on a cumulative basis. Third quarter standalone revenue was 4.374 billion yen, 108.7% of the prior year period, with third quarter standalone operating profit of 340 million yen, 158.8% of the prior year period (also an all-time high). Within LOWYA, the OMO (online flagship store + offline physical store) channel achieved cumulative revenue of 2.529 billion yen, 127.5% of the prior year period, accounting for 57.8% of total LOWYA revenue (an increase of 8.5 percentage points from the prior year). Cumulative gross profit margin for LOWYA was 51.5% (up 1.5 percentage points year-over-year), and cumulative SG&A rate was 45.2% (down 0.1 percentage points year-over-year). Third quarter standalone gross profit margin was 52.4% (up 3.0 percentage points year-over-year), and third quarter standalone SG&A rate was 44.7% (up 0.7 percentage points year-over-year, within the range of expected error). 2. DOKODEMO Segment: Cumulative GMV for the first three quarters was 1.603 billion yen, 95.0% of the prior year period, with cumulative revenue of 259 million yen, 98.5% of the prior year period. Third quarter standalone GMV was 504 million yen, with a net operating loss of 7 million yen. Taiwan accounts for 80% of DOKODEMO's total GMV, while US shipments have remained suspended since summer 2025 following the repeal of the US de minimis rule, leading to continued weak overall performance and a slight negative operating profit.

• DOKODEMO continues to face operational and financial headwinds from the repeal of the US de minimis rule, which has forced the suspension of US shipments and led to a year-over-year decline in GMV and revenue, resulting in a slight negative operating profit for the segment.
• While current yen exchange rate movements (USD/JPY in the 140-145 yen range) do impact input costs, all foreign exchange exposure for the current fiscal year has already been hedged, so there is no impact to current fiscal year gross margins.

No structured question and answer section is included in the provided earnings call transcript.