Kotobukiya (7809) FY2026 Earnings Deep Dive: Navigating Global IP Expansion Amid Rising Manufacturing Costs

This report provides a comprehensive analysis of Kotobukiya Co., Ltd. (Securities Code: 7809) based on its financial results for the fiscal year ended June 2026, covering performance, revenue structure by region and product category, financial health, and the outlook and growth strategy for the fiscal year ending June 2027.

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1. FY2026 Earnings Overview: Revenue Growth Overshadowed by Soaring Costs

For the fiscal year ended June 2026, Kotobukiya reported net sales of 16,777 million yen (up 1.7% YoY) , operating profit of 764 million yen (down 52.5% YoY) , ordinary profit of 843 million yen (down 46.8% YoY) , and net profit attributable to owners of the parent of 497 million yen (down 54.4% YoY) .

Compared to the initial guidance (net sales of 16,500 million yen, operating profit of 800 million yen), net sales reached 101.7% of the target, while operating profit fell short at 95.6%. Conversely, ordinary profit exceeded the target, landing at 117.1% of the forecast.

The steady performance in net sales was primarily driven by robust demand in overseas markets. However, the 50% decline in operating profit was attributed to the persistent weakness of the yen and rising raw material costs , which inflated manufacturing expenses, alongside a downward trend in the number of units sold per item , leading to an overall compression of profitability.

The slide above provides critical data on the company's FY2026 performance, year-on-year comparisons, target achievement rates, and key drivers of profit fluctuations. As shown, while the company maintained record-high net sales of 16,777 million yen , the rising cost of sales significantly pressured the bottom line. Notably, the ratio of proprietary IP sales expanded to 48.1% (up 3.3 percentage points YoY) , signaling successful market penetration of the company's own brands.

Additionally, the recognition of extraordinary losses warrants attention. As part of its management efficiency initiatives, the company transferred the e-commerce business in China, previously handled by the joint venture "Kotobukiya Fengzheng Culture Development Co., Ltd.," to its wholly-owned subsidiary "Shanghai Kotobukiya Import & Export Co., Ltd." Consequently, the company decided to liquidate the joint venture and recorded the anticipated liquidation-related losses as extraordinary losses .

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2. Revenue Analysis by Region and Product Category: Strong Growth in Overseas Plastic Models

Revenue Trends by Region

Looking at the regional revenue breakdown, domestic sales dipped slightly to 11,851 million yen (down 2.3% YoY) , while overseas sales rose to 4,925 million yen (up 12.7% YoY) , bringing the overseas revenue share to 29.4% .

• Japan : 11,851 million yen (70.6% of total, down 2.3% YoY)
• Asia : 3,256 million yen (19.4% of total, up 6.0% YoY)
• North America : 1,484 million yen (8.8% of total, up 34.5% YoY)
• Europe : 154 million yen (0.9% of total, down 8.7% YoY)

The North American market, with a 34.5% YoY increase , showed rapid growth, serving as a powerful driver for overall overseas performance alongside the Asian market (up 6.0% YoY).

Revenue Trends by Channel and Product Category

Performance by product category showed a divergence between domestic and international markets.

The slide above is essential for analyzing the breakdown of sales by channel (domestic/overseas, wholesale/retail) and product category (figures, plastic models, miscellaneous goods). As the data clearly shows, growth was driven by the overseas plastic model segment, which recorded a significant increase in sales to 3,071 million yen (up 20.8% YoY) . Proprietary IP products, particularly "bishoujo" (beautiful girl) plastic models such as Megami Device, Sousai Shojo Teien, and Arcanadea, have gained strong support from overseas users. Conversely, domestic figures (1,166 million yen, down 27.8% YoY) and overseas figures (1,592 million yen, down 6.8% YoY) struggled, likely due to intensified competition in the figure market and shifts in consumer sentiment.

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3. Balance Sheet Status: Maintaining a Sound Financial Foundation

The status of the company's assets, liabilities, and net assets as of the end of June 2026 is as follows:

• Total Assets : 12,883 million yen (down 566 million yen from previous year-end)
• Current Assets : 8,633 million yen (down 459 million yen)
• Non-current Assets : 4,249 million yen (down 106 million yen)
• Total Liabilities : 4,584 million yen (down 824 million yen)
• Net Assets : 8,298 million yen (up 258 million yen)
• Equity Ratio : 64.4% (up 4.6 percentage points)

With current liabilities decreasing by 643 million yen (down 20.4% YoY), the company successfully reduced its debt, resulting in an equity ratio of 64.4% . Despite the challenges in profitability, the company maintains a high level of balance sheet safety and financial soundness.

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4. FY2027 Earnings Forecast and Future Growth Strategy

FY2027 Full-Year Consolidated Earnings Forecast

The company has disclosed the following outlook for the fiscal year ending June 2027:

• Net Sales : 17,000 million yen (up 1.3% YoY)
• Operating Profit : 800 million yen (up 4.6% YoY)
• Ordinary Profit : 740 million yen (down 12.2% YoY)
• Net Profit Attributable to Owners of the Parent : 500 million yen (up 0.4% YoY)
• Assumed Exchange Rate : 160 JPY/USD

The slide above presents the FY2027 earnings targets and the key underlying assumptions, visualizing both the positive and negative factors surrounding the company.

[Structure of Positive and Negative Factors]

1. Market Expansion and Sales Growth (Positive) : While the bishoujo plastic model market is highly competitive, the market itself is in an expansionary phase, particularly overseas, which is expected to drive sales growth.
2. Concentration of New Product Releases (Trend) : Product shipment plans are heavily weighted toward the second half compared to FY2026, which may lead to uneven performance progress between the first and second halves.
3. Continued Rise in Manufacturing Costs (Negative) : In addition to rising labor and raw material costs at contract factories in China, the weak yen environment (assumed rate of 160 JPY/USD) is expected to keep product and mold manufacturing costs elevated.
4. Increase in SG&A Expenses (Negative) : Rising labor and logistics costs continue to act as a drag on rapid margin improvement.

Detailed Forecast by Region and Product

For FY2027, the company projects modest growth across all regions: Japan at 11,932 million yen (up 0.7% YoY) , Asia at 3,352 million yen (up 3.0% YoY) , and North America at 1,517 million yen (up 2.2% YoY) . The goal is to reach total overseas sales of 5,067 million yen (up 2.9% YoY) , increasing the overseas revenue share to 29.8% .

By product category, the company plans to maintain a slight upward trend, led by overseas plastic models (3,114 million yen, up 1.4% YoY), while also steadily growing domestic plastic models (3,660 million yen, up 1.2% YoY).

Shareholder Return Policy (Dividend Plan)

Prioritizing stable shareholder returns, the company plans an annual dividend of 45.00 yen per share for FY2027 (a payout ratio of 72.7% ). By setting a high payout ratio relative to profit levels, the company is clearly demonstrating its commitment to returning value to shareholders.

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5. Summary: Key Points to Watch

In summary, the focus for Kotobukiya following its FY2026 results and FY2027 outlook will be on the following:

• Market Share Expansion in Overseas Bishoujo Plastic Models : Can the company maintain and strengthen the competitiveness of its proprietary IP (e.g., Megami Device) in the high-growth plastic model category, particularly in North America and Asia?
• Response to Rising Manufacturing and Logistics Costs : How effectively can the company improve or defend its gross margins through price revisions and production efficiency in the face of rising costs at Chinese contract factories and currency fluctuations?
• Progress of New Product Releases (Second-Half Weighting) : Since the FY2027 plan is weighted toward the second half, the successful launch and sales of products during this period are critical to achieving the earnings targets.
• Effectiveness of China Business Restructuring : Will the transfer of the e-commerce business to a subsidiary and the subsequent restructuring successfully control management costs and restore sales?