Retty FY2026 Q3 Earnings Deep Dive: Rebuilding Profitability and Expanding New Business through Structural Reform and Direct Sales Shift

This report provides a multi-faceted analysis of the Q3 FY2026 earnings results for Retty, Inc. (Securities Code: 7356) , which operates a real-name gourmet platform. We examine the performance highlights, factors behind the downward revision of the full-year forecast, trends in key performance indicators (KPIs), and future growth strategies.

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1. Performance Highlights and Q3 Year-to-Date Results

For the first nine months of the fiscal year ending September 2026, Retty reported net sales of 1,130 million yen (92.1% year-on-year) , an operating loss of 17 million yen (compared to an operating profit in the same period last year), an ordinary loss of 25 million yen , and a net profit of 54 million yen . For the third quarter alone, net sales were 335 million yen with an operating loss of 38 million yen.

Primary Reasons for Operating Loss

The shift to a loss in the third quarter is primarily attributed to the following three factors:

1. Loss of certain large-scale projects and delays in delivery within the Integrated Solutions (TSR) segment.
2. Decline in sales due to the expiration of contracts for certain alliance projects.
3. Incurrence of initial recruitment costs associated with the shift from an agency-dependent model to a strengthened direct sales structure.

Conversely, to strengthen its financial position, the company sold one unlisted security, recording a gain on sale of investment securities of 92 million yen as an extraordinary profit , which ensured a net profit for the period.

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2. Revision of Full-Year Earnings Forecast and Background

Following the Q3 results, the company announced a revision to its full-year earnings forecast.

The slide above is a critical comparison table showing the transition from the initial plan, the pre-revision forecast, and the current revised full-year earnings forecast . While the initial and pre-revision plans anticipated full-year net sales of 1,603 million yen, operating profit of 47 million yen, and net profit of 124 million yen, the revision has adjusted these figures to net sales of 1,496 million yen (down 6.6%) , operating profit of 10 million yen (down 78.7%) , and net profit of 79 million yen (down 36.3%) .

Detailed Breakdown of Revision Factors

Looking at the 37 million yen downward revision in operating profit, the impact of missing sales targets in the core Restaurant Support Service (FRM) business (5 million yen) was largely offset by the reduction in sales promotion expenses (such as agency commissions). The primary cause is the loss and delay of projects in the Integrated Solutions segment (30 million yen) . The increase in common costs was limited to 2 million yen, indicating that the majority of the underperformance stems from project progress risks in specific areas.

Sales Certainty for Q4

Regarding the revised Q4 sales plan (366 million yen), 87% (317 million yen) is already covered by confirmed July results (118 million yen) and contracted/ordered projects (199 million yen) . The portion dependent on new sales acquisition is limited to just 1.7% (6 million yen), meaning the revised outlook is based on a highly feasible and solid foundation. Furthermore, to clarify management responsibility for falling short of the initial plan, three internal directors have decided to voluntarily return 20% of their monthly compensation (for the three-month period from July to September 2026) .

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3. Core Business Trends and Key KPIs (Online Reservation Referrals and Paid Members)

The most critical indicators for measuring Retty's sustainable growth are the "number of online reservation referrals," which indicates platform usage, and the "number of paid restaurant members," which forms the revenue base.

The slide above shows the quarterly trend of the company's most important KPI: the number of online reservation referrals . Despite efforts to control operating costs, strategic development investments, such as continuous UI improvements, have resulted in a steady year-on-year increase of +11% in online reservation referrals . Improved convenience from search to reservation has contributed to higher user retention, leading to increased referral value for restaurants.

Signs of a Turnaround in Paid Restaurant Members

The number of paid restaurant members (fixed plans + pay-as-you-go) had been on a downward trend, reaching 6,734 as of the end of June 2026 (a decrease of 158 from the previous quarter). However, with the full shift from agency-based to direct sales, the number turned to a net increase in July 2026, reaching 6,817 , and recurring revenue has also begun to rise. Since the direct sales model eliminates agency commissions and offers higher contract retention rates, a structure is being established where the accumulation of new member stores will directly contribute to improved profit margins.

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4. Business Structural Reform (Restructuring) and Cost Optimization via AI

To fundamentally improve its profit structure, Retty is executing a business structural reform (restructuring) .

Optimization of Organizational Structure and Fixed Cost Reduction

To adapt to the changing business environment driven by rapid advancements in AI technology, the company implemented voluntary retirement for 7 employees , representing approximately 8.0% of the total workforce, effective June 30, 2026. The cost-reduction effect from this personnel reduction is expected to take full effect from the fourth quarter (July-September) onwards , contributing to the compression of fixed costs.

Business Redesign Leveraging AI Technology

The company has integrated generative AI and proprietary AI tools into deep layers of its internal operations, achieving significant productivity gains:

• Automation of Agency Commission Calculations : Transformed spreadsheet processing into an AI tool, reducing monthly man-hours by approximately 80% .
• Automation of Accounting/Legal Routine Tasks : Reduced document filing time from 1.5 hours to 15 minutes and cut contract review man-hours by approximately 50% .
• Creative Production : Utilized generative AI to drastically reduce individual production time from one day to one hour .
• Automated Output of Sales KPIs : Introduced AI-driven sales analysis to promote immediate visualization of field issues.

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5. Future Growth Strategy: Business Expansion into Asset-Light Peripheral Areas

Leveraging its long-standing restaurant member base (a network of approximately 6,800 stores) and accumulated real-name review data , the company is expanding into new areas beyond its existing referral and promotional support services.

As shown in the slide above, Retty is launching new businesses using an "asset-light" approach that does not require significant upfront investment, combining its own assets with the expertise of specialized partner companies.

Key Pillars of Initiatives

1. Restaurant Brand Succession and M&A Brokerage
   • Partnered with WIT Co., Ltd. of the Synchro Food Group (launched in July). Provides business succession and M&A brokerage services specializing in intangible assets such as restaurant brand names, trademarks, recipes, and supplier relationships.
2. AI Training Business for Restaurants
   • Partnered with GMO Connect's training expertise. Provides hands-on practical programs (12 hours total: 3 hours x 4 sessions) to restaurant corporations, supporting the improvement of generative AI utilization at the store level.
3. Other Areas Under Consideration
   • The company plans to flexibly enter and expand into areas addressing restaurant management challenges, such as labor-saving/store DX, e-commerce/takeout, recruitment, property/store opening, and finance/cash flow management.

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6. Conclusion and Future Outlook

In the third quarter of FY2026, Retty experienced a transitional period of sluggish sales due to temporary project delays and the shift to direct sales, necessitating a downward revision of its full-year earnings forecast. However, behind these figures, the most important KPI, the number of online reservation referrals, maintained a +11% year-on-year growth , and the number of paid members turned to a net increase starting in July.

Furthermore, the company is steadily advancing its profit base reconstruction measures, including realized fixed cost reductions from voluntary retirements , reduction of operational man-hours through AI utilization , and expansion into peripheral businesses such as M&A brokerage and AI training using its own assets . The key point to watch moving forward is how effectively the transition to a direct sales structure and structural reforms will translate into a re-expansion of operating profit.