Takara Tomy Q1 FY2027: Revenue up 7.7%, operating profit jumps 19.9%

Takara Tomy started fiscal 2027 on a strong note, reporting first-quarter revenue of ¥64,047 million, up 7.7% year on year. Operating profit rose 19.9% to ¥5,512 million, while net income attributable to owners of the parent climbed 19.6% to ¥4,058 million. The operating margin improved to 8.6% from 7.7% a year earlier, putting the company on track toward its full-year target of 10%.

Domestically, sales were lifted by robust demand from Kidults, with the 'Tomica Premium' series and Pokémon-related merchandise benefiting from the franchise's 30th anniversary buzz. The release of 'Toy Story' also boosted sales of gacha and plush toys at Takara Tomy Arts, while Kiddy Land's new concept store 'Omokado' and inbound tourism demand contributed further. In the Americas, revenue was dented by shipment delays caused by an ERP system glitch that emerged in April, but a roughly ¥1 billion tariff refund lifted operating profit. Europe and Oceania showed signs of recovery, and Asia delivered double-digit revenue and profit growth, standing out as a key driver.

By geography, Japan remained the largest contributor with revenue of ¥56,428 million, up 8.0%, and operating profit of ¥6,159 million, up 5.3%. The Kidults demographic and IP content continued to perform well, and Takara Tomy Arts' gacha and plush toys appealed across age groups. Kiddy Land's new store opening and tourist demand also supported growth.

The Americas segment reported a 6.7% decline in revenue to ¥5,096 million, as the ERP implementation issue delayed shipments. However, operating profit swung to a ¥397 million profit from a loss of ¥254 million a year ago, helped by a tariff refund and transfer pricing adjustments. Stabilizing the new system remains a priority.

Europe posted revenue of ¥1,468 million, a 45.4% jump, buoyed by new products such as 'TWINCHEES' and 'THE TRAITORS'. The operating loss narrowed to ¥129 million from ¥213 million. Oceania also returned to profitability, with revenue of ¥727 million, up 40.4%, and operating profit of ¥37 million, compared with breakeven a year earlier.

Asia was the star performer, with revenue surging 20.9% to ¥20,455 million and operating profit up 29.7% to ¥845 million. 'BEYBLADE X' gained explosive popularity in Hong Kong and Taiwan through social media and events, while 'Tomica' extended its brand reach with the opening of a fifth TOMICA BRAND STORE in Hong Kong, cementing Asia's role as a growth engine.

Total assets at the end of the quarter stood at ¥160,449 million, down ¥2,911 million from the previous fiscal year-end, largely due to cash outflows from share buybacks exceeding increases in receivables and inventories. The equity ratio remained high at 67.9%.

On the shareholder return front, Takara Tomy plans to raise its annual dividend to ¥70 per share (interim ¥35, year-end ¥35), up from ¥64 in fiscal 2026, marking the sixth consecutive annual increase. The company is also in the process of executing a ¥10 billion share buyback authorized in February 2026. During the first quarter, 1,637,300 shares were repurchased for approximately ¥4.37 billion, lifting treasury stock to ¥17,152 million. Net assets per share came to ¥1,264.67. While cash flow details are unavailable as statements are yet to be prepared, the company appears to balance aggressive shareholder returns with a solid financial base.

The first quarter surfaced several risks:

• ERP system disruption: The new system deployed in the Americas in April caused shipment delays and a revenue dip. Restoration efforts are underway, but rapid stabilization is critical.
• Currency volatility: The company booked a foreign exchange loss of ¥77 million in non-operating items. A stronger yen would pose headwinds for its export-oriented business.
• Geopolitical and tariff risks: U.S. tariff policy changes could affect earnings; the recent refund was a one-off boost, not a structural advantage.
• Competitive landscape: The toy and entertainment industry faces intensifying IP acquisition rivalry. Heavy reliance on hit IPs and shortening content lifecycles require constant renewal.
• Managing growth investments: Ongoing upfront spending in areas like Asia and gacha operations needs careful control to prevent margin erosion.

Takara Tomy left its full-year forecast unchanged. It expects revenue of ¥285,000 million (up 5.4%), operating profit of ¥26,000 million (up 7.2%), ordinary profit of ¥26,000 million (up 5.9%), and net income of ¥18,000 million (up 54.1%). The substantial net profit jump partly reflects the absence of prior-year extraordinary losses.

After the first quarter, revenue and operating profit achievement rates against the full-year targets stand at 22.5% and 21.2%, respectively, broadly in line with the plan. Given robust Asian momentum and steady domestic demand, the company is well positioned to meet its targets, though progress in resolving the Americas' IT issue and exchange rate movements will be swing factors.

On February 10, 2026, the board resolved to repurchase up to 3 million shares, or ¥10 billion in total, through July 31, 2026. By the end of the first quarter, 1,637,300 shares had been acquired, lifting treasury stock to ¥17,152 million from ¥12,779 million at the previous year-end. This is expected to boost return on equity.

Simultaneously, the dividend outlook was raised from ¥64 to ¥70 per share, extending the company's streak of annual dividend increases to six years. Backed by improving profitability and cash generation, Takara Tomy is stepping up shareholder returns. The simultaneous buyback and dividend hike signals a strong commitment to enhancing shareholder value.