Round One Q1 FY2027 Earnings Deep Dive: A Growth Story Driven by Strong Domestic Same-Store Sales and Strategic Initiatives

1. Earnings Overview and the Transition to IFRS

Round One Corporation (Securities Code: 4680) reported strong performance growth for the first quarter of the fiscal year ending March 31, 2027 (April 1, 2026 – June 30, 2026), exceeding both year-on-year results and internal targets, driven by robust same-store sales in its core domestic business and the success of various new initiatives.

To enhance the comparability of financial information and improve management efficiency, the Group has voluntarily adopted International Financial Reporting Standards (IFRS) starting from the fiscal year ended March 31, 2025 . The figures in this report are prepared in accordance with IFRS, ensuring a financial foundation that meets global standards while maintaining continuity with previous Japanese GAAP reporting.

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2. Q1 Earnings Highlights: Significant Outperformance Against Targets

Consolidated results for the first quarter of FY2027 showed revenue of 51.37 billion yen (+18.2% YoY), operating profit of 6.33 billion yen (+4.3% YoY), and profit for the period of 3.36 billion yen (-1.1% YoY). The increase in operating days and the solid performance of domestic existing stores contributed significantly to the revenue growth.

Of particular note is the progress against the company's previously announced targets. The slide below illustrates the comparison between the Q1 plan and actual results.

Slide Analysis: Key Takeaways vs. Plan

As evidenced by the data in the slide above, Q1 results significantly outperformed the plan:

• Revenue : Actual 51.37 billion yen vs. Plan 476.4 billion yen ( +7.8% or +3.73 billion yen above plan )
• Operating Profit : Actual 6.33 billion yen vs. Plan 5.41 billion yen ( +17.0% or +0.91 billion yen above plan )
• Operating Profit Margin : Rose to 12.3% against a planned 11.4%.

By segment, all core divisions (Bowling +8.2%, Amusement +8.8%, Karaoke/Dining +10.4%) exceeded their targets. While expenses increased due to amusement-related prize costs, labor costs, and commissions, the growth in the top line absorbed these costs, resulting in an operating profit margin of 12.3% , an improvement of +0.9 percentage points against the plan.

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3. Domestic Segment Trends and Drivers of Core Division Strength

Domestic store sales have been exceptionally strong. In Q1, total domestic store revenue reached 28.54 billion yen (+5.2% vs. plan), and domestic same-store sales recorded a high growth rate of +16.1% YoY .

Domestic same-store sales trends by division are as follows:

• Bowling Division : +11.6% (+3.5% vs. plan)
• Amusement Division : +20.1% (+8.9% vs. plan)
• Karaoke Division : +14.0% (-0.3% vs. plan)
• Spo-cha Division : +12.5% (+0.6% vs. plan)

The growth in the Amusement division (+20.1%) is particularly notable, serving as a powerful engine for overall store revenue growth. The synergy between the recovery in general leisure demand and specific store-level initiatives is evident across all divisions, including bowling, karaoke, and Spo-cha.

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4. Core Growth Drivers: The "Toresugi-no Island" Concept and DX Initiatives

The dramatic growth in the Amusement division is underpinned by the new initiative in the crane game area: "Toresugi-no Island" (The 'Easy-Win' Island).

Slide Analysis: Importance and Performance of "Toresugi-no Island"

The slide above outlines the concept and performance impact of the new crane game area, which has been rolled out sequentially since February 2026.

• Concept : Unlike traditional areas focused on IP figures and plush toys, this area features food and daily necessities, emphasizing "ease of winning" and "value for money." Although the cost-of-sales ratio is set approximately twice as high as traditional areas, it has successfully attracted a broader customer base, including families and beginners.
• Rollout Progress and Results : Implementation was completed in 86 stores by the end of Q1 (end of July). Revenue for crane games in these stores has achieved a significant +35% increase YoY , exceeding the planned assumption of +30%.

Furthermore, the company is optimizing store operations through thorough Digital Transformation (DX) :

• Digitalization of Front-End/Service : Self-service reception and payment kiosks, along with digital assistants, have streamlined operations and reduced labor requirements.
• Smart Back-End : Full-chain implementation of the "R-Shift" automated scheduling tool and efficiency gains in inventory management via smartphone barcode scanning.
• Future Outlook : The company aims to implement pre-booking and payment functions via a dedicated app and introduce multi-language support for kiosks to capture inbound demand and achieve a zero-wait customer experience.

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5. Global Expansion and New Growth Drivers: The U.S. Market and "Round One Delicious"

Expanding the U.S. market and developing new business formats play a critical role in Round One's growth strategy.

(1) U.S. Segment Expansion and Japanese Food Halls

As of the end of July 2026, the company operates 59 stores in the U.S. As a new differentiation strategy in the U.S. market, the company is opening and expanding stores featuring "Japanese Food Halls." By integrating popular Japanese food outlets—such as ramen, udon, and takoyaki, which are highly regarded in Japan—adjacent to traditional entertainment facilities (amusement, bowling, etc.), the company aims to maximize foot traffic.

(2) New Project: "Round One Delicious"

Additionally, the "Round One Delicious Project" is underway as a new initiative in the 'Other' segment. This project involves unitizing authentic Japanese cuisine (sushi, kaiseki, Chinese, tempura, etc.) that has earned top ratings in Michelin and other guides, and opening them in overseas markets, primarily in North America.

• Opening Plan : The first and second units are scheduled to open in Las Vegas and Los Angeles starting in Q3 of FY2027, with plans to expand to New York and other locations by FY2028.
• Business Scale (per store) : A high-value-added model with an investment of approximately $1.4 million, an annual foot traffic target of 4,000 people, an annual revenue target of $3 million , and an average spend of approximately $750. Openings are planned for global tourist and high-net-worth hubs, such as the "Las Vegas Blvd" store and the "LA West Hollywood" store.

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6. Mid-to-Long-Term Earnings Trends and FY2027 Full-Year Plan

We examine the trajectory of the company's mid-to-long-term earnings growth and the full-year consolidated plan for FY2027.

Slide Analysis: Long-Term Earnings Trends and Profitability Evolution

The slide above lists the trends in store count, revenue, and various profit indicators from FY2020 to the FY2027 plan.

• Growth Foundation : The number of stores is expected to increase from 144 in FY2020 to 172 in the FY2027 plan .
• Revenue and Operating Profit Growth : The company aims to more than double its revenue from 104.7 billion yen in FY2020 to 219 billion yen in the FY2027 plan . Operating profit is also planned to reach 33 billion yen , maintaining high profitability with an operating profit margin of 15.1% .
• Capital Efficiency (ROE/ROIC) : In the FY2027 plan, the company targets highly efficient capital management with an ROIC of 12.0% and an ROE of 20.5% .

The data shows that the company has completely moved past the deficit phase caused by the pandemic in FY2021 and FY2022, establishing a robust, high-profit structure through increased crane game installations, collaboration campaigns, and aggressive new store openings.

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7. Capital Allocation and Shareholder Return Policy

In the capital allocation plan for FY2027, the company prioritizes a balance between growth investment and shareholder returns.

• Operating Cash Flow : Expected to generate 69.6 billion yen .
• Capital Expenditure (OUT) : 42 billion yen planned for new store openings and renewal investments, such as installing the latest equipment in existing stores.
• Debt Repayment/Interest (OUT) : 41.4 billion yen allocated for loan repayments and lease obligations.
• Shareholder Returns (OUT) : 4.7 billion yen allocated for dividends.

The dividend policy aims to maintain an annual dividend of 18.0 yen per share (4.5 yen per quarter) , with a target payout ratio of around 25% of the profit for the period as initially planned.

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Conclusion

Round One's Q1 FY2027 earnings represent a strong start, significantly exceeding targets due to the strong momentum of domestic same-store sales and the success of new initiatives like "Toresugi-no Island" in boosting average spend and customer traffic.

Moving forward, the company plans to pursue multi-faceted growth axes both domestically and internationally. This includes further refining profitability through DX investments in Japan, opening large-scale complex entertainment stores with integrated food halls in the U.S., and venturing into high-value-added food businesses through "Round One Delicious."