Kurashicom Inc. Q1 FY2026 earnings call

Overall Financial Performance

• The quarter delivered a record high consolidated revenue of 2.433 billion yen, up 28.4% year-over-year. Consolidated EBITDA reached 341 million yen, 2.4x higher year-over-year, with an EBITDA margin of 14%, up sharply from the prior year.
• Operating income hit 323 million yen (2.6x YoY), and net income attributable to the parent company reached 219 million yen (2.8x YoY), driven by strong gross profit growth (up 30.3% YoY to 1.055 billion yen) and controlled selling, general and administrative (SG&A) expense growth (up only 7% YoY to 731 million yen).

Customer and Engagement Growth

• Total engagement accounts (app, YouTube, social media followers) surpassed 10 million (excluding 330,000 trial overseas followers). Total buyers reached 117,000, up 17.2% YoY, with 28,000 new members added in the quarter, an all-time high post-IPO.
• Growth was broad-based: repeat buyers grew steadily, new customer acquisition hit record levels, and lapsed returning buyers also increased at a strong pace, confirming healthy, demand-driven growth.

Multi-Category Growth Strategy (Hokuiku, Kurashi no Doguten)

• The exclusive ARABIA Pomona reissued series, sold only by Classico in Japan, sold nearly 30,000 sets in ~2 months, far exceeding expectations. The collaboration demonstrated a repeatable model of exclusive reissues of popular vintage products with premium brands, following the prior successful Noritake partnership, and drove strong new customer acquisition.
• The focus cosmetics category continued steady growth, now accounting for ~5% of segment revenue, with a new original cream added to the skincare line that has received strong customer acceptance.

Overseas Expansion Trial

• The company launched a trial of 3 regional Instagram accounts (English-speaking markets, Taiwan, South Korea) in mid-August, gaining 330,000 followers in 2-3 months with minimal overhead, using AI to add local-language subtitles to existing Japanese content. The website is being modified to support ~10 languages, and the company will continue testing to identify market fit and explore future international business opportunities.

foufou Segment Updates

• Strong first quarter growth was partially driven by the new flagship store in Sendagaya, which had a better-than-expected opening after soft launching in October and officially opening in November. Instagram follower growth is also steady, and management expects the store to continue contributing to revenue in future quarters.

1. Hokuiku, Kurashi no Doguten (Northern European Lifestyle Goods Store): Revenue was 2.348 billion yen, a 26.6% increase year-over-year. It contributed 96.5% of total consolidated revenue. EBITDA came in at 335 million yen, slightly above forecasted levels as marketing costs came in lower than projected. 2. foufou: Revenue was 115 million yen, 2.7x higher year-over-year. It contributed 4.7% of total consolidated revenue before consolidation eliminations. EBITDA turned positive to 15 million yen, from a negative EBITDA in the prior year quarter. 3. Consolidation Elimination: 30 million yen in intersegment revenue and 9 million yen in unrealized profit were eliminated, resulting in total consolidated revenue of 2.433 billion yen.

• Management reaffirmed the full-year guidance provided at the start of the fiscal year, noting that first quarter progress is very healthy. Consolidated revenue progress is 23.9% of the full-year forecast, with profit progress of 22-23%, which is in line with expectations given the company's seasonal sales pattern, where Q2 (fall/winter) and Q3 (spring/summer) typically account for the majority of annual revenue.
• The full-year annual dividend forecast of 48 yen per share remains unchanged.
• Hokuiku, Kurashi no Doguten is 24% through full-year revenue guidance and 22.5% through full-year EBITDA guidance, while foufou is 25.1% through full-year revenue guidance and 36.6% through full-year EBITDA guidance, with both segments tracking well ahead of pace adjusted for seasonality.

• The foufou segment remains small and faces organizational and operational challenges: the team is still building out internal capacity, and needs to develop a repeatable framework for planning hit products and expanding assortment.
• Rising interest rates have very limited direct financial impact due to the company's strong balance sheet with almost no debt, but could indirectly affect equity market valuation and potentially tighten access to future capital if needed.
• While inventory has increased by ~500 million yen from the prior quarter-end, management confirms the increase is intentional preparation for fall/winter selling in Q2, not a build-up of stale or unsellable inventory.

Q: What is the company's full-year marketing investment outlook, given first quarter ad spend reached 280 million yen (11.7% of revenue)? / A: Management has targeted holding marketing investment to ~12% of revenue or lower, which supports achieving 15% EBITDA margin while growing the business. The first quarter outcome matches this target, and ad spend remains within plan, with no overinvestment. The company will continue to maintain this disciplined approach through the full year, delivering strong growth while meeting profit targets.

Q: What impact did the ARABIA Pomona series have on the business, and what does it mean for future strategy? / A: Pomona sold nearly 30,000 sets in two months, far exceeding forecasts. Because the product was an exclusive reissue of a highly sought-after vintage Nordic design, it drove an unusually high rate of new customer acquisition, as many customers who did not know the brand came specifically to purchase the series. This confirms the repeatability of the exclusive collaboration/reissue model that was first tested with Noritake, and validates this as a core growth strategy going forward.

Q: Is the recent inventory increase a sign of poor inventory health, and is the early December discount sale a reaction to weak sales? / A: The inventory increase is entirely intentional: the company built up inventory in preparation for the Q2 fall/winter selling season, which is typically one of the strongest selling periods for the company's apparel business. There is no elevated level of stale or bad inventory. The early December sale was planned as part of balanced promotional strategy, not a reaction to unexpectedly weak sales, so inventory health remains strong.

Q: What are the key growth challenges for foufou, and how is the business leveraging the Nordic store's existing know-how? / A: foufou completed building its core operational foundation (management systems, logistics infrastructure) in its first year, then rolled out a data-driven merchandising framework in year two, which enabled the strong 2.7x revenue growth this quarter. Key remaining challenges are scaling the small organization and building a repeatable process for developing hit products, as the brand remains in growth stage. Management is building on prior investments to continue addressing these challenges steadily.