ZOZO (3092) Q1 2026 (Q&A) earnings summary

Executive summary

• First quarter performance was generally in line with the original plan, with profit exceeding expectations due to deferred promotion expenses and improved operational efficiency, despite a slight GMV undershoot from unplanned large-scale promotions.

• Gross Merchandise Value (GMV) for 1Q FY2025 reached 159.2 billion yen, up 12.2% year-over-year, with an achievement rate of 23.6% against the revised annual plan.

• EBITDA for the quarter was 18.5 billion yen, an 8.9% increase year-over-year, with an EBITDA margin of 12.5%.

• LYST LTD was acquired in April 2025 and consolidated from May, marking a strategic move for global expansion and impacting both GMV and expense structure.

• ZOZOTOWN and LY Corporation Commerce both saw growth, while BtoB business declined; LYST contributed 4.7% of GMV.

Financial highlights

• Net sales for Q1 FY2026 rose 7.2% YoY to 54,028 million yen, with net sales for FY2025 forecast at 231.5 billion yen, up 9.7% from the previous forecast.

• Operating profit increased 6.4% YoY to 16,920 million yen; operating profit for FY2025 is projected at 69.2 billion yen, a 6.9% increase YoY.

• Profit attributable to owners of parent is forecast at 47.8 billion yen, up 5.4% YoY; net profit per share is estimated at 53.66 yen.

• Gross profit margin declined 1.4 pts YoY to 34.0% due to LYST's lower commission model.

• M&A and one-time expenses for the quarter were approximately JPY 800 million, with outsourcing at JPY 20 billion and other items over JPY 600 million.

Outlook and guidance

• The plan for the year is considered organic, with OP expected to remain stable and GMV subject to market fluctuations.

• GMV (excluding other GMV) is expected to grow by 13.8% YoY for FY2025; EBITDA is forecast to increase by 9.9% YoY.

• Profit attributable to owners of parent projected at 47,800 million yen (+5.4% YoY); EPS forecast at 53.66 yen.

• Next year, Lyst is expected to remain in a loss-making phase, with losses potentially similar to or slightly higher than this year due to ongoing investments.

• Promotional expenses for Lyst are expected to remain at around 8% of GMV next year, as platform improvements will take time.