Kotobuki Spirits Q1 FY2027: Revenue up 10%, operating profit up 21%

For the fiscal first quarter ended June 2026, revenue came to 18,668 million yen, up 10.0% year on year. Operating profit rose 20.7% to 4,152 million yen; ordinary profit increased 20.3% to 4,178 million yen; and net income attributable to owners of the parent grew 18.6% to 2,731 million yen. All segments posted higher sales and profit.

The top-line expansion was driven by stronger sales of mainstay products and seasonal limited editions, along with stepped-up efforts to capture inbound tourists, especially through additional sales staff at international airport terminals and event-based marketing. New brands such as 'Mili Mili' and 'Hakata Oriōri,' as well as the consolidation of 'Hakone Tokinomi,' also contributed.

On the profit side, the gross margin improved, and although selling, general and administrative expenses increased, the operating margin remained high at 22.2%. Company-wide expenses rose by about 100 million yen, but this was absorbed by profit growth at each segment.

Sucré Group (Tokyo Milk Cheese Factory, Butter Butler, etc.): Sales 8,629 million yen (+6.8%), operating profit 1,641 million yen (+25.7%). The 10th anniversary campaign for Butter Butler, renewed Cocolis products, and new brands in the Fukuoka/Nagasaki area lifted results. New store openings included 'Mili Mili' at Isetan Shinjuku and 'Hakata Oriōri' at Daimaru Fukuoka Tenjin, expanding the brand portfolio.

KCIC Group (LeTAO, Pista & Tokyo, etc.): Sales 5,376 million yen (+9.9%), operating profit 1,016 million yen (+16.9%). The LeTAO brand from Otaru offered limited sweets at Sapporo Daimaru and Unga Plaza shops, enhancing brand value. Tokyo-area brands boosted recognition through pop-up stores. The segment name was changed from 'KCIC' to 'KCIC Group' following the establishment of Hakone Tokinomi.

Kotobuki Seika Group (Inaba no Shiro Usagi, New Q, etc.): Sales 4,293 million yen (+12.5%), operating profit 1,033 million yen (+23.8%). New product development and agency-led sales initiatives hit the mark. In Okinawa, the second 'New Q' pineapple sweets specialty store opened at Naha Airport. The operating margin reached 35.4%, the highest among all segments, and serves as a high-profit foundation.

Sales Subsidiaries: Sales 1,952 million yen (+9.7%), operating profit 276 million yen (+32.8%). Region-focused brands performed well: 'Ogura Toast Langue de Chat' in the Tokai region, 'Osaka Torasando' in Kansai, and 'Hakata Makkana Ichigo' in Fukuoka.

Other (insurance agency, health foods, Taiwanese confectionery): Sales 148 million yen (+48.1%), operating loss of 3 million yen (improved from a loss of 13 million yen a year earlier).

Total assets at the end of the quarter stood at 56,299 million yen, down 3,843 million yen from the prior fiscal year-end, mainly due to a decrease in cash (3,388 million yen) and collections of receivables (1,687 million yen). Tangible fixed assets increased by 637 million yen, reflecting ongoing capital expenditure. Liabilities fell by 1,197 million yen to 11,008 million yen, while net assets totaled 45,290 million yen. The equity ratio rose to 80.4%, up 0.7 percentage points from the year-end, underscoring a robust financial position.

On shareholder returns, the company introduced an interim dividend, revising the FY2027 annual dividend to 45 yen per share (10 yen interim, 35 yen year-end), up 10 yen from the prior year. An interim dividend was introduced, strengthening shareholder returns, and the policy change was disclosed in an August 3, 2026 announcement. The aim is stable and continuous returns while maintaining an appropriate level of internal reserves. Depreciation increased to 410 million yen from 368 million yen in the previous fiscal year, though a quarterly cash-flow statement was not prepared.

Key risks identified by the company include geopolitical instability such as the Middle East situation, which could lead to higher raw material and energy costs, and food price inflation may weigh on consumer spending. Currency fluctuations could also affect imported ingredient procurement. Maintaining differentiation and brand strength amid competition remains an ongoing challenge. Under the medium-term plan 'Value Up Vision 2030,' the company is focusing on strengthening product appeal, sales floor capabilities, and overall selling power.

The full-year forecast for FY2027 was kept unchanged from the May 14 announcement: revenue of 84,500 million yen (+7.3% year on year), operating profit of 20,550 million yen (+10.5%), and net income of 13,810 million yen (+10.0%). At the Q1 stage, progress against the full-year target reached 22.1% for revenue and 20.2% for operating profit, representing a solid start.

A new subsidiary, Hakone Tokinomi Co., Ltd., was established on April 1, 2026, under the KCIC Group, aiming to accelerate brand deployment and new product development in the Hakone area. The medium-term plan 'Value Up Vision 2030' sets a slogan of 'Create one passionate fan today' and prioritizes enhancing product value, sales floor power, inbound tourism initiatives, and human capital.