9278.T

• Consolidated Financial Summary

  • For the first half of the 2026 May fiscal year (cumulative H1), consolidated revenue reached 61.104 billion yen, up ~4 billion yen from the prior year prior period. Operating income was 1.264 billion yen, ordinary income was 1.454 billion yen, and net income attributable to parent shareholders was 0.741 billion yen, all slightly below prior year prior period levels. Q1 saw higher proactive spending that pulled ordinary income below prior year levels, but Q2 returned to year-over-year ordinary income growth, pushing the company back to profit growth from Q1 to Q2.
  • Operating cash flow increased after the elimination of special investigation costs related to last year's fraud incident, and the company continues to pursue proactive investment within the scope of operating cash flow. Total assets are 58.623 billion yen, net assets are 19.229 billion yen, and the equity ratio is 32.3%.

• Mid-Term Management Strategy (targeting 2028 May fiscal year)

  • The overall strategy is to deepen Bookoff's core business while expanding exploration into non-Bookoff businesses to form a 'Bookoff Group that is not just Bookoff', through transforming the business portfolio to achieve stable and accelerated growth. The 2028 May fiscal year targets are 135 billion yen in revenue and 5 billion yen in ordinary income, with domestic Bookoff business delivering stable profit and premium service, overseas, and other new businesses adding incremental profit. The value creation structure uses profit from domestic Bookoff as capital for reinvestment across all growth businesses, with early-stage investments targeting long-term growth 5 to 10 years out.
  • Domestic Bookoff Business: Prioritize improving customer reuse experience, keep books as the core accessible product, expand product mix based on local customer needs, and pursue digital transformation and large-format store conversion. As of H1, direct store revenue is up 43% compared to 5 years ago, with non-book/soft media products driving all growth. Conversion to large-format BOOKOFF SUPER BAZAAR has lifted average annual revenue per store from 150 million yen to 239 million yen. Digital initiatives include cashless purchase, pre-purchase price search, and an official member app that reached 9.87 million members as of November 2025; in-store pickup sales grew 22% year-over-year, driving add-on purchases and supporting in-store revenue, with 50% of official website sales coming through the app.
  • Premium Service Business: Target underpenetrated high-net-worth consumers through new dedicated brands (hugall, Rehello, aidect) to expand the reuse market. The 100-store target remains unchanged, but new store opening pace has slowed due to competitive pressure and talent delays; the company will end the H1 with 57 stores, currently focusing on improving existing store service quality and talent development. It is rebranding its existing affluent-focused purchasing service to Rehello to better target consumers unused to reuse, with plans to shift from replacement openings to net new store openings next fiscal year.
  • Overseas Business: Target 100 BOOKOFF USA stores in the US and 100 Jalan Jalan Japan stores across Asia, for 200 total overseas stores. In the US, the 2028 target is 30 stores, on track to reach 22 stores this fiscal year, with new entry into Texas and Michigan planned, and local native employee and store manager development accelerated to support nationwide expansion; potential tariff impacts after the Trump administration are minimal since most business is local purchase and sale. For Jalan Jalan Japan centered in Malaysia, the 2028 store target was revised down from 70 to 50 after exiting the Kazakhstan joint venture, but the goal of doubling the current store count remains; it will reach 26 stores this fiscal year, is currently focused on improving existing store performance, and is evaluating expansion into other Asian markets.

• Sustainability and Industry Development Initiatives

  • The domestic reuse market is currently 3 trillion yen, projected to grow to 4 trillion yen, but only 1 in 3 consumers reuse annually, with most holding negative impressions of reuse. The company partnered with other industry players to hold a 'Reuse Day' event backed by the Japanese Ministry of the Environment, drawing over 500 attendees, with 90% of respondents reporting improved understanding and more positive impressions of reuse after the event.
  • The SustainaBook Project donates books to facilities with limited book budgets (nurseries, after-school programs); it expanded to 25 prefectures in 2025, donating 5,884 books, allowing customers to participate in social contribution through normal store visits.
  • The R-LOOP drop-off collection program lets consumers drop off unused clothing, accessories, and home goods at public locations for reuse/recycling; it had 320 installed locations as of November 2025, collecting 37 tons annually, in partnership with local governments to reduce waste and expand reuse access.
  • Over 80% of consumers surveyed expressed empathy, support, and expectation for these three initiatives. Additional sustainability work includes TCFD alignment for climate action, carbon neutrality targets, renewable energy adoption, diversity initiatives for female management and parental leave, and community reuse events like Reclothes Cup and the Mori no Miyako Reuse Festival.

• The full year 2026 May fiscal year guidance is maintained unchanged from the July 2025 announcement: 127 billion yen in consolidated revenue, 3.8 billion yen in operating income, 4 billion yen in ordinary income, and 2.2 billion yen in net income attributable to parent shareholders. The year-end dividend per share is also maintained at 30 yen.
  • Management expects Q3 and onward to perform above 2024 levels and exceed prior fiscal year profit, with strong year-end purchasing in domestic Bookoff and growing precious metal-related purchases and sales expected to support full year performance, and the company sees the existing full year guidance as achievable, targeting full year profit growth above the prior year's record high ordinary income.
  • The company plans to open roughly 10 new stores across each of its three core businesses this fiscal year, with accelerated new openings in other new business segments; 12 new stores were opened in H1 across domestic and international markets.

1. Domestic Bookoff Business: Revenue of 52.952 billion yen, segment profit of 2.339 billion yen, accounting for approximately 86.7% of total consolidated revenue. Directly operated existing stores posted a 106.6% average revenue compared to the prior year period; core books and soft media achieved roughly flat year-over-year sales, while trading cards/hobbies and precious metals/watches/brand bags grew strongly driven by store renewal investments and rising precious metal market prices. Inbound duty-free sales grew 131.2% year-over-year, with soft media and trading cards/hobbies now accounting for over 40% of inbound sales. 2. Premium Service Business: Revenue of 4.029 billion yen, segment profit of -0.014 billion yen, accounting for approximately 6.6% of total consolidated revenue. Purchasing volume for the high-net-worth buyer business grew 116.7% year-over-year driven by rising precious metal prices. The segment swung to profit growth in Q2 after a large profit decline in Q1 caused by carryover inventory and tight purchasing conditions. 3. Overseas Business: Revenue of 3.326 billion yen, segment profit of 0.365 billion yen, accounting for approximately 5.4% of total consolidated revenue. The US business grew revenue 124.6% year-over-year in local currency terms and remained strongly profitable. Malaysia's Jalan Jalan Japan achieved 107.9% year-over-year revenue growth, but aggressive new store openings delayed talent development and reduced existing store operating performance, pulling down overall segment profit. The elimination of Kazakhstan business losses allowed the segment to return to year-over-year profit growth in Q2.

• Domestic Bookoff Business: Rising equipment prices are increasing costs for aggressive system investment, pressuring short-term profit.
  • Premium Service Business: Slow purchasing growth amid workforce expansion prevented the segment from growing gross profit enough to offset higher costs, leading to a segment loss in H1.
  • Overseas Business (Jalan Jalan Japan, Malaysia): Aggressive new store openings led to staff reallocations from existing stores to new locations, with inexperienced staff taking over existing store management and delayed training, leading to lower existing store operating performance and reduced segment profit. The segment has not yet fully recovered, though improvement is ongoing.
  • Other new businesses: Early-stage seed investments are pressuring current consolidated profit.
  • Precious metal market: While rising precious metal prices have boosted purchasing and sales to date, increasing industry competition for precious metal purchases creates uncertainty about future purchasing growth, and the long-term trend of market conditions is difficult to forecast currently.

Q: Given the current rising precious metal market trend, can we expect the business environment after Q3 to remain the same as Q2?

A: As a general trend, rising market prices tend to increase purchasing volume, which the company is optimistic about. However, consumer stock levels and competitors are also raising purchase prices, so competitive dynamics make it hard to give a definitive forecast at this point. That said, purchasing across the entire company (not just premium service) has been strongly positive as of December 2025, and management expects this positive trend to continue after Q3.

Q: H1 cumulative ordinary income came in below the prior year. Can you break down performance between Q1 and Q2, and share your view on the achievability of the maintained full year guidance?

A: The prior year's Q1 had artificially high profit because the company cut costs (including canceling events and promotions) after the prior year fraud incident, so this year's Q1 profit decline is mostly a base effect from that prior year cost cutting. Compared to two years ago, this year's Q1 revenue is strong and profit is actually higher when adjusted for the base effect. Q2 also shows solid profit growth in line with revenue growth when compared to two years ago. The distorted profit base from last year's cost changes makes year-over-year H1 comparisons hard to interpret. Going forward, management expects Q3 and onward to outperform two years ago and exceed prior year full year profit. Strong end-of-year purchasing and growing precious metal-related sales are expected to support the second half, and the full year guidance remains achievable, with the company on track to exceed last year's record ordinary income.

Q: Existing Jalan Jalan Japan stores in Malaysia are seeing year-over-year revenue declines. What countermeasures are you implementing?

A: The issue stemmed from communication mismatches between domestic and local teams around product assortment, timing, and delivery for new store openings one year ago. Additionally, opening new stores required reallocating experienced existing store staff to new locations, leaving less experienced staff to run existing stores with insufficient training. As the chain has grown to 15 stores, customers can now shop at a nearby location instead of traveling farther, so the business needs stronger local marketing to drive foot traffic that was not required in earlier stages. Current countermeasures include local marketing initiatives like billboards, wrapped buses, and other advertising to build local awareness. Existing store sales have now recovered to prior year levels, and management plans to continue investing in store manager training and local promotion to drive revenue growth above prior year levels starting next fiscal year.