Explanation of Results of Operations （First Quarter of FY3/2026）

Summary

（JPY: Million）

【Summary for 1Q of FY 3/2026】

• Compared with the initial forecast, net sales in the first quarter increased 49.1% year on year, exceeding initial expectations, mainly due to growth in Product Sales and Licensing in Japan. SG&A expenses fell below the initial forecast, resulting in an 88.0% year-on-year increase in operating profit to 20.1 billion yen.
• Collaborations with major licensees featuring multiple characters drove strong performance in the domestic Product Sales and Licensing businesses. The domestic Product Sales and Theme Park businesses saw a year-on-year increase in customer traffic and average spend per person, supported by an increase in domestic visitors and sustained strong inbound demand.
• Performance in the overseas Licensing Business remained strong, driven by increased character recognition through digital touchpoints, which supported broader use in apparel, toys, and other products. Growth in China was a key contributor.
• The 40th Sanrio character ranking (2025) attracted a record-high number of votes cast at more than 63.16 million votes, up 10.7% from the previous year, with the increase in overseas votes contributing to this result. This strong engagement further accelerated fan loyalty.
• Consolidation adjustments due to differences in accounting period had a positive impact of 2.0 billion yen on operating profit.

Reportable Segment

Segment Sales Ratio

i. Japan: Net sales rose 38.1% year-on-year to 24.4 billion yen and operating profit rose 57.9% to 12.1 billion yen.

In the product sales business, Hello Kitty maintained its strong momentum, and the popularity of other characters increased as well, contributing to higher sales. These characters include Kuromi, celebrating her 20th anniversary; My Melody, marking her 50th anniversary; and Pompompurin, who won first place in the popularity voting event 2025 Sanrio Character Awards (April 10–May 25). At retail stores, the share of sales from foreign tourists remained high, at around 40%, while domestic customer numbers also rose. Both the average spending per customer and the total number of customers increased. Moreover, our efforts in recent years to improve store operations, including strengthening the supply system through automated ordering of standard products and increasing the number of checkout counters, have proved effective.
In the licensing business, the continued popularity of a wide range of Sanrio characters led to significant sales growth, driven by an increase in the number of products offered by major existing licensees and an extension of licensing agreements. Breaking it down by product category, items in high demand among inbound tourists, including souvenirs, traditional Japanese-pattern goods, and capsule toys, performed well, as did collaborative products linked to the 2025 Japan International Exposition (Expo 25 in Osaka). The Hello Kitty exhibition now touring Japan, titled “As I change, so does she” —held at the Okinawa Prefectural Museum & Art Museum (March 7–May 11) and the Fukuoka Art Museum (June 24–August 31)—has also contributed to raising brand awareness. Operating profit rose due to an increase in sales.

ii. Europe: Net sales rose 199.8% year-on-year to 2.1 billion yen and operating profit rose 528.9% year-on-year to 0.6 billion yen.

In the licensing business, sales rose significantly, driven by the continued strategy of featuring a wide range of Sanrio characters and successful initiatives with global brands. In particular, growth was led by the apparel category, which benefited from partnerships with major fast fashion brands in various European countries, and the toy category, which also featured a wide range of Sanrio characters. Operating profit increased due to sales growth.

iii. North America: Net sales rose 23.1% year-on-year to 5.7 billion yen and operating profit rose 133.4% year on-year to 2.7 billion yen.

The licensing business saw significant sales growth in the toy, apparel, and digital categories. In the toy category, plush toys and other products developed through collaborations with major toy manufacturers and popular American characters performed strongly. The apparel category expanded its product lineup for the mass market (such as large retail chains) through initiatives with existing licensees. Meanwhile the digital category helped enhance brand awareness for a wide range of Sanrio characters through game content on major platforms.
Additionally, as part of its initiatives to enhance brand value, the Group conducted collaborative projects with high-end brands. To expand customer touchpoints, it held events in partnership with professional sports leagues, including MLB (baseball), NHL (hockey), and NBA (basketball). Operating profit rose due to an increase in sales, despite a higher marketing expenses.

iv. Latin America: Net sales rose 89.2% year-on-year to 0.6 billion yen and operating profit rose 106.2% year-on year to 0.2 billion yen.

In Latin America as a whole, the licensing business performed well in the categories of apparel, health & beauty, stationery, accessories and corporate special sales. Moreover, characters other than Hello Kitty grew in popularity, including Kuromi, which is celebrating its 20th anniversary, and My Melody, which is marking its 50th.
In Mexico, the stationery category, which includes desk supplies for children and teenagers, performed well, as did the corporate special sales category, which featured marathon events for women and children. In Brazil, the health & beauty category performed strongly, driven by the success of a lip balm developed in collaboration with the country’s largest pharmaceutical company. Additionally, a restaurant themed around Sanrio characters attracted attention with its exclusive My Melody menu. In Chile, both the stationery and apparel categories showed robust growth. In Peru, sales were driven by the accessories and apparel categories. Operating profit increased due to sales growth.

v. Asia: Net sales rose 84.8% year-on-year to10.0 billion yen and operating profit rose 132.8% to 5.7 billion yen.

In China, licensing business sales in the toys & hobby, apparel and accessories and household product categories were strong. The popularity of Hello Kitty, which celebrated its 50th anniversary with various initiatives in the previous fiscal year, remained strong. Meanwhile, characters such as Kuromi and Cinnamoroll also saw increased popularity. Growing attention to other characters, including Hangyodon and My Sweet Piano, further contributed to the success of the strategy for a wide range of Sanrio characters. In the product sales business, strong performances at existing stores and the opening of new locations led to a significant increase in sales.
In South Korea, the health & beauty category in the licensing business performed well; however, overall sales declined due to an economic slowdown caused by political instability and the bankruptcy of a major general merchandise supermarket.
In Taiwan, the licensing business performed well in the toy and apparel categories. In addition, the strategic deployment of a wide range of Sanrio characters proved successful. Notably, the popularity of Kuromi has surged, leading to significant sales growth.
In the Hong Kong and Macau region, the licensing business saw growth in sales, driven by the success of the corporate special sales category, which implemented initiatives in collaboration with financial institutions and local governments.
In Southeast Asia, sales of the licensing business were driven by multi-regional expansion through toy licensees. By category, in addition to a strong performance in the toys category, the corporate special sales category also performed well, contributing to sales growth. While Hello Kitty maintained its strong momentum, the popularity of other characters, including Kuromi, My Melody, and Cinnamoroll, also grew. Operating profit increased due to sales growth across Asia.

Explanation of Financial Position

（JPY: Million）