CROOZ Returns to Operating Profit on SES Expansion; Pivots to Hotel Conversion as Third Growth Pillar Targeting 52% FY27 Sales Growth

CROOZ, Inc. (TSE: 2138), a Tokyo-based holding company spanning IT outsourcing, e-commerce and emerging real-estate businesses, reported consolidated full-year results for the fiscal year ended March 31, 2026 (FY2026/3) under Japanese GAAP. Net sales declined 16.7% year-on-year to ¥11,820 million, largely reflecting the February 2025 divestiture of the SHOPLIST fashion-EC business. Operating profit, however, swung to a positive ¥23 million from a ¥1,025 million loss the prior year, and ordinary loss narrowed to ¥170 million from ¥837 million. Net loss attributable to owners of the parent improved to ¥470 million from ¥530 million, equating to a basic loss per share of ¥49.18 versus ¥53.74.

IT Outsourcing carries the year

Under a revised segment structure that reclassified the former GameFi business into "Other," the IT Outsourcing segment — centred on systems engineering services (SES) for Japan's chronically undersupplied IT-engineer market — posted sales of ¥7,713 million (+55.6%) and segment profit of ¥274 million (+131.2%). The core SES business alone generated ¥4,193 million in sales with ¥270 million in profit, while the nursing-care and welfare staffing line contributed ¥1,139 million in sales but a ¥152 million segment loss.

The EC segment recorded sales of ¥3,740 million (-46.1%) on the SHOPLIST exit, yet segment profit rose 65.7% to ¥73 million as the remaining Ada. fashion select shop — operated mainly inside ZOZOTOWN — expanded approximately 28.1% on a like-for-like basis. ZOZO, Inc. remained the only customer above the 10% concentration threshold, contributing ¥3,728 million through the EC channel. The "Other" category, now housing residual GameFi and adjacent operations, posted sales of ¥366 million (-84.0%) and a ¥324 million segment loss — narrower than the prior year's ¥1,188 million.

Real-estate book swells; cash drawn down

Total assets rose to ¥30,800 million (+¥1,270 million), driven by a ¥5,007 million expansion of investment real estate to ¥17,028 million, partly offset by a ¥3,529 million decline in cash and deposits to ¥6,574 million. Long-term borrowings climbed ¥3,851 million to ¥13,357 million while ¥2,000 million of corporate bonds were redeemed; the equity ratio slipped to 28.4% from 31.1% and net assets per share were ¥914.50. Operating cash outflow narrowed to ¥141 million, investing activities used ¥7,632 million (primarily ¥5,276 million for property purchases plus ¥2,000 million in time deposits), and financing inflows of ¥2,231 million reflected new long-term borrowings net of bond redemption. Rental-related costs of ¥483 million tied to the expanding property portfolio were partly offset by ¥549 million of rental income.

Hotel Conversion: the third growth pillar

For FY2027/3, CROOZ guides net sales of ¥18,000 million (+52.3%), operating profit of ¥608 million, ordinary profit of ¥159 million, and net profit attributable to owners of ¥48 million (EPS ¥5.08). The step-change reflects the launch of a "Hotel Conversion" business — acquiring older small- and mid-sized buildings and converting them into hotels to address Japan's inbound-tourism-driven accommodation shortage — positioned as the third growth pillar alongside IT Outsourcing and EC. Management frames the model as long-term income-gain rather than short-term property trading. No dividend was paid for FY26 and none is forecast for FY27, consistent with prior policy. As a post-period event, the company also announced that segments from FY27 will be restructured into five lines: Hotel Conversion, Nursing-Care Staffing, Engineer Staffing, Call-Center/Recruitment/HR Placement, and EC (Ada.).

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.