PAL GROUP Holdings CO (2726) Q2 2025 earnings summary

Executive summary

• H1 FY2025 revenue reached ¥101,259 million, up 8.3% YoY; operating income rose 28.6% to ¥11,806 million and interim net income increased 9.5% to ¥7,668 million.

• Results exceeded initial forecasts, supported by strong household goods sales, higher gross margin and SG&A controls.

• PALCLOSET-led EC growth and continued 3COINS + plus expansion offset weaker performance at some casual apparel brands.

• A June 2024 server failure due to illegal access was fully restored by early August; direct losses were expected within anticipated extraordinary losses.

Financial highlights

• Consolidated gross profit was ¥56,673 million, up 8.3% YoY; gross margin was 56.0%, up 0.8 percentage points.

• Operating income rose 28.6% YoY to ¥11,806 million; operating margin was 11.7%, up 1.4 points. Ordinary income was ¥11,956 million, up 28.8%.

• Interim net income attributable to parent shareholders was ¥7,668 million, up 9.5% YoY; basic EPS was ¥88.33, versus ¥79.93.

• Consolidated SG&A increased 6.8% to ¥44,866 million, while the SG&A ratio fell 0.3 points to 44.3%; rent ratio declined 0.3 points to 11.3%.

• Comprehensive income reached ¥7,681 million, up 9.7% YoY.

Outlook and guidance

• FY2025 forecast revised to revenue ¥209,220 million, operating income ¥22,960 million, ordinary income ¥23,260 million and net income ¥14,820 million.

• Revised forecasts are 2.8% above the prior revenue estimate and 14.1%–14.5% higher for gross profit, operating income, ordinary income and net income.

• Full-year gross margin forecast is 55.6%, up 0.4 points from the prior forecast; H2 assumptions include SG&A controls.

• Year-end store count forecast is 1,066, including 18 w closet and 55 NOLLEY'S stores; full-year same-store sales forecast is 103.0% of prior year.

• Year-end dividend forecast maintained at ¥50 per share.