■Performance Trends

1. Financial Summary for the Fiscal Year Ending March 31, 2024

The financial results for the fiscal year ended 2024/3 of the RIZAP Group ＜2928＞ were sales revenue of 166,298 million yen (up 7.6% from the previous fiscal year), operating loss of 594 million yen (loss of 4,948 million yen in the same period last year), loss before income tax of 4,524 million yen (loss of 7,031 million yen), and net loss attributable to owners of the parent company was 4,300 million yen (loss of 12,673 million yen). A surplus of 4,175 million yen was achieved in the fourth quarter alone on an operating income basis due to the surplus shift in the ChocoZap business.

Regarding sales revenue, the RIZAP related business (including the ChocoZap business) increased drastically (20,100 million yen increase compared to the previous fiscal year) by focusing on expanding the convenience store gym “ChocoZap,” which is in full swing. ChocoZap increased by 904 stores during the period, and the number of stores at the end of the 2024/3 fiscal year ended was 1,383. Since then, it has increased to 1,500 stores as of 2024/5/15. The number of members is also growing steadily, surpassing 1 million during the period, over 1.1 million as of 2024/2, and over 1.2 million as of 2024/5. In existing businesses, while there was an increase in sales (same increase of 4,198 million yen), starting with Antirosa, there was a decrease in sales (same 5,998 million yen decrease) due to store structural reforms such as REXT, etc., and the effects of selling the Shikata business under the umbrella of the subsidiary BRUNO at the end of the previous fiscal year (same 5,111 million yen decrease). Regarding operating losses, the ChocoZap business transitioned to a payback period, and the Group as a whole improved due to surplus in the second half of the 2024/3 fiscal year and the success of business portfolio reforms such as REXT.

(1) Health care/beauty segment

As a result of the strategic investment described above in the ChocoZap business, the number of stores reached 1,383 stores (end of fiscal year) and the number of members reached 1.1 million people (2024/2), and surplus was achieved on a monthly settlement basis from 2023/11 to 2024/3. In the existing body makeup business, membership retention rates and LTV (lifetime sales per customer) increased due to the shift to a subscription (lifetime type) business model. Synergistic effects have been shown in mutual customer delivery etc. between the body makeup business and the ChocoZap business. MRK Holdings ＜9980＞ has expanded its customer base by developing new products, opening/relocating/refurbishing, advertising investments, etc. in businesses such as women's underwear. Sales revenue in the healthcare and beauty segment was 63,237 million yen (up 47.8% from the previous fiscal year), and operating losses were 3051 million yen (loss of 5,782 million yen in the previous fiscal year).

(2) Lifestyle segment

In REXT, the shift to a high-profit business type progressed in the trading card business, entertainment business, and reuse business, respectively, and profitability improved. BRUNO's in-house site development in China was booming, and although outdoor-related and travel-related sales were strong domestically, sales and profit declined because the main kitchen appliances and interior appliances showed a lull in demand. In Dream Vision ＜3185＞, sales and profits declined due to the effects of the weather after fall, increases in purchase unit prices, and soaring logistics costs. The lifestyle segment's sales revenue was 82,589 million yen (down 8.2% from the previous fiscal year), and operating profit was 2,525 million yen (up 58.6% from the same period).

(3) Investment segment

SD Entertainment increased profits by working on structural reforms and growth strategies in its main wellness business. At Horita Marusho, sales and profit declined due to the effects of gift business sales and upfront investments in each business. Sales revenue in the investment segment was 24,953 million yen (up 1.5% from the previous fiscal year), and operating profit was 1311 million yen (up 0.2% from the same period).

(Written by FISCO Visiting Analyst Hideo Kakuta)