C'BON COSMETICS Co.,Ltd. Q4 FY2025 earnings call

• Overall Strategic Progress
  • FY2025 March was the second year of the 2024-2026 mid-term management plan, focused on three core priorities: product value improvement, salon value improvement, and creation of new value. Management will continue pursuing these priorities for the final year of the plan.
• Product Value Improvement Initiatives
  • Completed 3 academic conference presentations, rebranded core products, and advanced product personalization during the fiscal year. The 8-product cleansing line was fully renewed with updated design to reach broader customer segments, achieving an average customer satisfaction rating of 90.2%.
  • Launched 2 made-to-order products in the "Beyond" line exclusively for royal customers, which received customer satisfaction ratings of 97.2% for the cream and 92.3% for the serum.
  • R&D has entered Phase 2, focused on restructuring the Seaborn aesthetic method and deepening anti-stress research to reinforce the company's identity as a salon-originated manufacturer.
• Salon Value Improvement Initiatives
  • Relocated and renovated 9 directly operated salons, enhanced staff training to improve customer and employee satisfaction, and hosted factory tours for royal customers. Relocated the company's in-headquarters training facility in September 2024 to expand training capacity, converted all training courses to on-demand video for repeated review, and required executive attendance at all training sessions to reinforce shared company philosophy and goals.
  • Store development progress included 1 new opening, 2 relocations, and 9 renovations planned for FY2026 March.
• New Value Creation Initiatives
  • Opened a new concept shop on the first floor of the new Roppongi headquarters building in January 2025, the company's first genderless salon, to test new commercial flow patterns and expand product awareness.
  • The 3-store neaf hair salon business is growing steadily, with cross-customer referrals between the co-located Kamata store and the adjacent facial salon delivering positive results.
  • The new Imatori business added 2 locations in FY2025 March to reach 3 total stores, though it missed its profit target for the period.
  • Actively pursued new domestic agency development to offset sales declines at aging existing major agencies, with new agency deals currently in progress.
  • Restarted production and shipments at the Jafmac subsidiary after a prior voluntary recall, though delayed re-launch pushed revenue below prior year levels. The company will strengthen sales of new Jafmac products through its facial salons to drive a recovery.
• Branding Project Progress
  • Held a rebranding press conference in January 2025 that was well attended by media and influencers, and the project has now entered Phase 2 focused on internal branding ahead of the company's 60th anniversary in January 2026. All staff are being engaged to align on Seaborn's unique value proposition and core strengths.

Seaborn reported total consolidated revenue of 8.838 billion yen, a 4% increase year-over-year, broken down by sales channel/segment as follows:

1. Directly operated stores (core business segment): 8.304 billion yen in revenue, representing 93.9% of total consolidated revenue. Revenue grew on the back of higher average purchase values from both new and existing customers.
2. Mail order: 273 million yen in revenue, representing 3.1% of total consolidated revenue.
3. Domestic agencies: 141 million yen in revenue, representing 1.6% of total consolidated revenue.
4. Overseas agencies: 15 million yen in revenue, representing 0.2% of total consolidated revenue.
5. Other (including subsidiaries): 104 million yen in revenue, representing 1.2% of total consolidated revenue. The Jafmac subsidiary segment saw revenue fall below prior year results due to delayed product development and re-launch after a prior voluntary product recall, though it is currently on a recovery trajectory. Profit results: Operating profit was 171 million yen, ordinary profit was 172 million yen, and net profit was 136 million yen, marking the company's return to full-year net profitability.

• For FY2026 March (full fiscal year), management guides consolidated revenue of 9.123 billion yen, operating profit of 201 million yen, and ordinary profit of 209 million yen. This represents continued year-over-year revenue and profit growth.
• The guided operating margin for FY2026 March is 2.2%, up from 1.9% in FY2025 March.
• For shareholder returns, management plans a full-year dividend of 20 yen per share, split as 10 yen per share for the interim dividend and 10 yen per share for the year-end dividend.

• Persistent staffing shortage at directly operated salons, despite already implemented base salary increases, expanded childcare short-time work policies, and knowledge sharing programs for staff returning from parental leave. Staffing shortage forced the company to narrow new customer acquisition targeting to high average purchase value segments during FY2025 March.
• The new Imatori concept business missed its FY2025 profit target, and requires expanded brand awareness to achieve early profitability.
• Seaborn's China-based overseas sales have seen a sharp decline, and the business requires new partner development to stabilize performance.
• Maintained sales and general administrative expenses stayed at the same level as the prior year for advertising, but increased by approximately 200 million yen total in FY2025 March due to rebranding costs and new depreciation from the completed Roppongi headquarters building.
• Existing customer retention visit numbers remained below prior year levels for the full FY2025 year, despite a recovery starting in January 2025.

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