Shares of Hello Kitty owner Sanrio plunged 18% on Wednesday in Tokyo following the company’s fiscal first-quarter results, after a runup in the stock over the last several months.
Sanrio reported revenue of 52.04 billion yen ($326 million) for the quarter ended June, up 20.7% from a year earlier, while operating profit rose 11.1% to 22.44 billion yen.
The company maintained its full-year forecast, expecting revenue to rise 18.4% to 229.8 billion yen and operating profit to increase 15% to 89.5 billion yen for the fiscal year ending in March.
Research firm Morningstar said the quarterly results were broadly in line with its estimates and left its fiscal 2026 and medium-term outlook unchanged. It noted that Sanrio shares had risen about 55% since its delayed full-year earnings release in June, saying they had reached fair value.
In Japan, Sanrio said the growing popularity of its characters helped drive a 43.5% year-over-year increase in contribution profit, with product sales benefiting from the rollout of original products and stronger performance at existing stores. Its license business also saw improved profitability per licensee, helped by the use of a broader range of characters.
In mainland China, both new and existing stores performed well.
In the Americas, Sanrio said sales showed signs of recovery as it continued to navigate the impact of tariffs. Growth in the toy and apparel categories, along with the broader use of characters led by Hello Kitty and Friends, supported performance.
Sanrio is expected to release a Nintendo Switch game in October, followed by a mobile game in 2027, as it expands into gaming, though Morningstar does not expect the segment to be a meaningful near-term profit driver.
By CNBC