7819.T

• Overall Financial Results • Total revenue for the 2025 September fiscal year was 22.1 billion yen, +5.7% YoY; operating profit was 1.46 billion yen, +45.5% YoY; both hit all-time record highs, marking the 5th consecutive year of revenue and profit growth, and the first record high profit in 14 years. • Gross profit margin improved 5.6 percentage points YoY to 31.9%; net income attributable to parent company shareholders was 0.97 billion yen, +26.4% YoY, boosted by a gain on the sale of Beautydoor shares. • Net assets stood at 7.8 billion yen, up 1.23 billion yen from the prior period end; free cash flow was 1.132 billion yen with no material solvency concerns, and the financial base was strengthened after the acquisition of Pico Monte Japan.

• Internal Reform Results (2019-2025) • Three core drivers of profit improvement: 1) Large increases in sales unit prices for NB and non-uniform PB products, delivering +3.1 billion yen in gross profit that more than offset the 1.6 billion yen cost increase from yen depreciation; 2) Controlled selling, general and administrative (SG&A) expenses: personnel costs fell 150 million yen from headcount reduction, and logistics cost ratio for SHOBIDO core operations decreased 2.6 percentage points after shifting to 3PL, while average annual wages increased 23% through performance-based pay; 3) Group restructuring: exit from unprofitable China local business and consolidation of Pico Monte Japan delivered incremental profit.

• Strategic Initiatives • "Only SHOBIDO" product development focuses on unique IP collaboration, design innovation, and added value to increase unit prices and margins, which has lifted the SHOBIDO brand value. In-house planned product sales grew 1.6x between 2019 and 2025, and the in-house planned product share rose 16 percentage points to 88.6%. • Kids cosmetics expansion: The growing kids cosmetics market has strong customer concern over safety; SHOBIDO leverages its cosmetics expertise to develop water-based, soap-removable, low-irritation products, upgrading kids cosmetics from toys to legitimate cosmetics. The company is now recognized as a leading player in the Japanese kids cosmetics market with high growth expectations. • New sub-licensing business: SHOBIDO has launched a new revenue stream where it holds sub-licensing rights from IP holders and issues sub-licenses to other manufacturers, collecting license fees. It already holds rights for multiple major IPs, and plans to expand underutilized Japanese IP to domestic and global markets.

• For the 2026 September fiscal year, management projects total revenue of 23.0 billion yen and operating profit of 1.6 billion yen, which would represent another all-time record high for both metrics. • The company will continue to evolve its dual growth model of NB and PB businesses, with a focus on developing EC-exclusive products and high unit-price products, continuing to build a high-margin operating structure through "Only SHOBIDO" product development. • Management will prioritize further improvement of SHOBIDO brand value, deepening product development, expanding EC sales, and driving productivity improvement through digital transformation (DX) to deliver sustained profit growth. • The company targets continued dividend growth, with a planned full-year dividend of 30 yen per share for 2026 September fiscal year, and commits to proactive shareholder return aligned with profit growth.

By product category: 1. Cosmetics: 8.85 billion yen in revenue, +9.2% YoY. Contributed 40% of total company revenue, driven by strong NB product performance, popular character-licensed and collaboration products, plus contribution from the newly acquired Pico Monte Japan. 2. Cosmetics accessories: 6.97 billion yen in revenue, +1% YoY, contributed 31.5% of total revenue, with character and collaboration products performing well. 3. Contact lens-related products: 2.24 billion yen in revenue, -10.5% YoY, contributed 10.1% of total revenue, impacted by the prior-year exit of the Chinese subsidiary's EC business. 4. Apparel accessories: 2.79 billion yen in revenue, +24.6% YoY, contributed 12.6% of total revenue, driven by strong demand for character-themed PB products for theme parks and retail partners. By business line: 1. NB (National Brand) business: 8.1 billion yen in revenue, +25.7% YoY, contributed 36.7% of total revenue, with high gross margin growth driven by the "Only SHOBIDO" product development strategy. 2. PB (Private Brand) business: Achieved both cost reduction and quality improvement through new partner factory development. 3. In-house planned products: 19.6 billion yen in revenue, +9.8% YoY, accounted for 88.6% of total revenue (an all-time high ratio). By sales channel: Variety stores and discount stores saw nearly 20% YoY revenue growth supported by inbound demand; uniform price shop orders decreased due to selective order acceptance focused on profitability.

• External headwinds: Persistently challenging operating environment with rising raw material prices, personnel costs, logistics costs, and market interest rates that increase financing costs. • Currency and input cost pressures: Yen depreciation over the 2019-2025 period pushed procurement costs up significantly; for the 2025 fiscal year, exchange rate fluctuations created a 158 million yen negative impact on operating profit, and domestic supplier cost increases created a 318 million yen negative impact. • Profit headwinds from strategic choices: Selective acceptance of low-margin orders reduced sales volume by 141 million yen in 2025, and increased SG&A from sales expansion, Pico Monte Japan acquisition, and EC investment created a 584 million yen negative profit impact (all offset by higher unit prices and margin gains).

The provided earnings call transcript does not include a question and answer section.