Daikokuya Holdings Q1 FY2027 Earnings Deep Dive

Daikokuya Holdings Co., Ltd. (Securities Code: 6993) has announced its financial results for the first quarter of the fiscal year ending March 31, 2027. Reflecting the success of structural reforms implemented through the previous fiscal year, the company has achieved a significant increase in net sales and a turnaround to operating profit .

This report extracts and organizes key topics from the recently released earnings presentation materials, providing a comprehensive analysis of the company's current performance and its medium-to-long-term growth scenario.

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1. Earnings Highlights and Transformation of Revenue Structure

The consolidated financial results for Q1 FY2027 (April–June 2026) showed remarkable improvement as follows:

• Net Sales : 3,651 million yen (+48.5% YoY)
• Gross Profit : 1,004 million yen (+45.8% YoY)
• Operating Profit : 133 million yen (compared to a loss of 283 million yen in the same period last year, marking a turnaround to profit )
• Inventory : 3,391 million yen (+155.3% YoY)

A major highlight is the successful securing of an operating profit , reversing the operating loss recorded in the same period last year. Notably, while net sales expanded rapidly, Selling, General and Administrative (SG&A) expenses were contained at 871 million yen (down 10.4% YoY). The drastic cost-cutting measures implemented in the previous term have paid off from the start of this fiscal year, significantly lowering the break-even point.

[Slide Commentary: PAGE_4]

The slide above details the consolidated income statement for the first quarter and its key takeaways. Of particular note is the "Daikokuya (Non-consolidated)" segment , which saw net sales reach 3,424 million yen (+43.7% YoY) and operating profit climb to 286 million yen (compared to a loss of 320 million yen in the same period last year), serving as a powerful driver for the entire group. Additionally, the on-site purchasing business (Luxwise) , which became a consolidated subsidiary in May 2026, contributed 168 million yen to net sales. Despite incurring approximately 100 million yen in one-time costs related to M&A and the relocation of the call center, the company achieved a consolidated operating profit, confirming an improvement in the company's underlying earning power.

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2. Balance Sheet Analysis and Strengthening Funding Capabilities

On the asset side, inventory , the source of future sales, has been expanded to 3,391 million yen (an increase of 2,063 million yen YoY). While procurement has been cautious to account for fluctuations in the second-hand luxury goods market—resulting in a slight lag against the full-year plan—it represents a significant accumulation compared to the previous year.

Furthermore, the company has secured 2,212 million yen in cash and deposits (+1,716 million yen YoY), providing sufficient liquidity for aggressive inventory procurement and growth investments. Regarding funding, the company has established a 1.9 billion yen credit facility with JRSFV (a fund managed by KSP) , ensuring the necessary working and growth capital for business expansion.

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3. Full-Year Earnings Forecast and Roadmap to Achievement

The company has maintained its full-year targets for the fiscal year ending March 2027:

• Net Sales : 22,251 million yen (+93.9% YoY)
• Operating Profit : 1,315 million yen (compared to a loss of 652 million yen in the previous year)
• Ordinary Profit : 1,137 million yen (compared to a loss of 881 million yen in the previous year)
• Net Income : 625 million yen (compared to a loss of 2,053 million yen in the previous year)

The company envisions a scenario where performance builds significantly toward the second half of the fiscal year.

[Slide Commentary: PAGE_10]

This slide visualizes the roadmap for achieving the full-year forecast. Having established a foundation for monthly and quarterly profitability in Q1, the company views Q2 as a "preparation period" for further initiatives, with plans to drive substantial profit growth through the year-end shopping season and the full-scale launch of new measures in Q3 and Q4.

Specifically, revenue is being built across three layers:

1. Profit improvement through structural reform : The effects of fixed cost reduction and a lower break-even point contributing throughout the year.
2. Re-expansion of on-site purchasing and existing businesses : Increasing inventory through expanded procurement, reopening stores that had suspended sales, and opening new locations such as in Nakano.
3. New businesses and initiatives : Establishing new revenue streams such as wholesale, live commerce, and corporate finance (investment/lending and pawn services).

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4. Progress of Key Initiatives in Core Businesses

① Daikokuya (Existing Stores and New Openings)

Regarding store strategy, the company is moving forward with the reactivation of stores that had temporarily suspended sales due to funding constraints, while shifting toward aggressive expansion centered on small-format stores (specializing in purchasing and pawn services) . A key highlight is the luxury watch event held at "Nakano Broadway" (July 28–30, etc.) . Based on the record of generating approximately 100 million yen in sales over a short period, the company is pursuing efficient location development, including plans to open a permanent store there starting in September.

② On-site Purchasing Business (Luxwise)

Although the on-site purchasing business, which launched in May 2026, prioritized procurement and buying initially, it achieved monthly operating profitability in June . By relocating and expanding the call center to Sendai, the company has tripled its appointment coordination capacity, completing the strengthening of its operational structure.

[Slide Commentary: PAGE_17]

The key to the growth of the on-site purchasing business is strengthening an "inbound" approach through business alliances with other industries. As shown in this slide, the company has entered into a business alliance with Bellco Co., Ltd. , a major player in the wedding and funeral industry. By directly approaching the "selling needs" that arise during end-of-life planning and estate organization among Bellco's vast member base, the company is building a mechanism to efficiently acquire high-quality visit appointments. Moving forward, the company plans to consider alliances with moving companies and firms targeting high-net-worth individuals, as well as expand the range of handled goods through partnerships with kimono and antique dealers.

③ New Initiatives (Live Commerce, Corporate Finance, etc.)

Developing new sales channels through B2B wholesale and live commerce is positioned as a measure to boost the top line without relying on the existing store network. Furthermore, the company is building a framework for corporate pawn and investment/lending businesses, with legal structuring and deal sourcing underway for a full-scale launch in the second half of the year.

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5. Summary and Future Focus

Daikokuya Holdings' Q1 FY2027 results demonstrate clear achievements: a turnaround to profit resulting from cost structure reforms and the acquisition and expansion of the on-site purchasing business .

Future focus areas include:

• Progress in inventory accumulation : Proper product sourcing and maintaining turnover rates to meet the full-year target (4.6 billion yen in year-end inventory).
• Execution of the second-half-weighted plan : Capturing demand during the Q3/Q4 year-end shopping season and the contribution of new initiatives (live commerce, Bellco alliance, etc.) to the bottom line.
• Launch speed of new and reopened stores : Progress in optimizing the store network, starting with the Nakano opening.

Attention will be focused on how the company's efforts, as it transitions from a structural reform phase to a profit expansion phase, will translate into financial results.