Japan Experts, Extraordinary Performance, Astris Advisory Japan

Astris Advisory Japan

Japan Experts, Extraordinary Performance

Our Corporate Advisory service is designed to give clients access to a wider range of investors. These include Japan specialists as well as global investors. The goal is to help achieve a fair equity valuation.

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<ul><li>Sales improve in Q3 but personnel and store opening costs weigh on OP – Although Q1-3 FY3/25 sales declined -3.4% YoY to ¥316.16bn, reflecting the difficult annual comps for new games and consoles in H1, in Q3 the absence of this drag meant that this quarter alone rose +4.3% YoY to ¥116.43bn.</li><li>Demand for reuse clothes and smartphones remained robust, buoyed by store openings, year-end sales for clothes and price conscious consumers.</li><li>However, increased hiring, base salary increases and credit card fees continued to eat into OP, which in FY3/25 Q1-3 fell -26.4% YoY to ¥9.82bn.</li></ul>

Sales improve in Q3 but personnel and store opening costs weigh on OP – Although Q1-3 FY3/25 sales declined -3.4% YoY to ¥316.16bn, reflecting the difficult annual comps for new games and consoles in H1, in Q3 the absence of this drag meant that this quarter alone rose +4.3% YoY to ¥116.43bn.Demand for reuse clothes and smartphones remained robust, buoyed by store openings, year-end sales for clothes and price conscious consumers.However, increased hiring, base salary increases and credit card fees continued to eat into OP, which in FY3/25 Q1-3 fell -26.4% YoY to ¥9.82bn.

Geo Holdings (2681 JP) - Q3 Sales Improve, but Costs Weigh on OP

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<ul><li>Revenue decreased by 3.4% YoY to JPY316.2bn, with a decline in new game console demand impacting sales.</li><li>Gross profit increased by 7.0% YoY to JPY127.3bn, while operating profit margin fell to 3.1% due to higher SG&A expenses.</li><li>Sales of secondhand goods rose 12.5% YoY to JPY140.4bn, driven by increased secondhand market demand and store expansions.</li></ul>

Revenue decreased by 3.4% YoY to JPY316.2bn, with a decline in new game console demand impacting sales.Gross profit increased by 7.0% YoY to JPY127.3bn, while operating profit margin fell to 3.1% due to higher SG&A expenses.Sales of secondhand goods rose 12.5% YoY to JPY140.4bn, driven by increased secondhand market demand and store expansions.

Geo Holdings (2681 JP): Q3 FY03/25 flash update

<ul><li><strong>Sales and profit fall</strong> – Q1-2FY3/25 sales and OP declined as the difficult annual comps for new games and consoles continued into Q2.</li><li>This ate into strong demand for the company’s reuse (second- hand) clothes and used smartphones.</li><li>Q1-2 sales fell 7.4% to ¥199.7bn while OP declined at a faster 25.9% pace to ¥5.4bn. </li></ul>

Sales and profit fall – Q1-2FY3/25 sales and OP declined as the difficult annual comps for new games and consoles continued into Q2.This ate into strong demand for the company’s reuse (second- hand) clothes and used smartphones.Q1-2 sales fell 7.4% to ¥199.7bn while OP declined at a faster 25.9% pace to ¥5.4bn. 

Geo Holdings (2681 Jp) - Sales, OP Fall Despite Strong Core Product Demand

<ul><li>Revenue decreased by 7.4% YoY to JPY199.7bn, with operating profit declining 25.9% YoY to JPY5.4bn.</li><li>Gross profit increased 7.8% YoY to JPY81.8bn, driven by a change in sales composition and higher gross profit margin.</li><li>Secondhand product revenue rose 10.9% YoY to JPY87.3bn, while new product revenue dropped 40.1% YoY to JPY44.5bn.</li></ul>

Revenue decreased by 7.4% YoY to JPY199.7bn, with operating profit declining 25.9% YoY to JPY5.4bn.Gross profit increased 7.8% YoY to JPY81.8bn, driven by a change in sales composition and higher gross profit margin.Secondhand product revenue rose 10.9% YoY to JPY87.3bn, while new product revenue dropped 40.1% YoY to JPY44.5bn.

Geo Holdings (2681 JP): 1H FY03/25 flash update

<ul><li>Q1 FY3/25 earnings look negative at first glance, with both sales and operating profit falling. However, the details show strong demand for GEO HOLDINGS’ core second-hand fashion business and smartphone sales, helping gross profit increase.</li><li>The key earnings drivers were a fall in sales (-6.2% YoY to ¥100.15bn) due to difficult annual comps from new games sales.</li><li>However, GEO HOLDINGS’ core second-hand fashion business and smartphones enjoyed robust demand, thanks to new store openings at home and overseas.</li></ul>

Q1 FY3/25 earnings look negative at first glance, with both sales and operating profit falling. However, the details show strong demand for GEO HOLDINGS’ core second-hand fashion business and smartphone sales, helping gross profit increase.The key earnings drivers were a fall in sales (-6.2% YoY to ¥100.15bn) due to difficult annual comps from new games sales.However, GEO HOLDINGS’ core second-hand fashion business and smartphones enjoyed robust demand, thanks to new store openings at home and overseas.

Geo Holdings (2681 Jp) - Q1 FY3/25 Results Update

Japan

GEO Holdings Corporation operates stores that rent and sell videos, CDs, DVDs, games, and books nationwide. The Company also buys and sells used books and CDs. GEO operates its own stores and also franchise stores.

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Geo Holdings (2681 JP)