Nagase Brothers Inc. (TSE: 9733), the education group that operates the Toshin High School and Toshin Satellite Prep School cram-school networks, the Yotsuya Otsuka elementary-school juku and the Itoman swimming schools, reported consolidated results for the first quarter of the fiscal year ending March 2027 (April–June 2026) under Japanese GAAP. Revenue rose 3.6% year on year to ¥14,211 million, but the group swung to an operating loss of ¥94 million (against a ¥29 million profit a year earlier), an ordinary loss of ¥101 million and a net loss attributable to owners of the parent of ¥305 million (against a ¥140 million profit). Basic EPS was minus ¥11.88, versus ¥5.33.
Upfront ad spending tips the quarter into the red
Costs rose 4.5% to ¥14,305 million, outpacing revenue, as Nagase ran television campaigns for the National United Elementary School Test and for summer student recruitment, and absorbed higher personnel costs from wage base-ups. The operating loss includes ¥371 million of strategic investment spending, mainly TV advertising; excluding it, operating profit would have been ¥276 million. A further ¥128 million of costs tied to the company's 50th anniversary — marked in May 2026 — was booked as an extraordinary loss. The quarter is seasonally weak by design: revenue is concentrated in the third and fourth quarters around student recruitment, while costs run ahead in the first half.
Toshin high-school arm drives growth
The high-school division — Toshin High School, Toshin Satellite Prep School and Waseda Juku — grew sales 7.4% to ¥6,524 million and lifted segment profit 21.0% to ¥867 million, as April–June new enrolments ran at 109% of the prior year and existing students sharply increased take-up of summer courses. The elementary and junior-high division (Yotsuya Otsuka, Kimura Juku) saw sales dip 0.6% to ¥2,807 million with profit down 30.8% to ¥221 million, including ¥58 million of goodwill amortisation. The sports division around the Itoman swimming schools posted sales of ¥4,450 million (+0.4%) but a ¥46 million segment loss against a ¥132 million profit, burdened by ¥67 million of goodwill amortisation; it opened the third "Pilates 30 Style" studio in Hiratsuka in May 2026. The business-school division narrowed its loss by ¥46 million to ¥164 million as it pushes into IT and DX corporate training, and the "other" segment — publishing, online school and kids' English — lifted profit 28.4% to ¥124 million.
Buyback and commemorative payout reshape the balance sheet
Total assets fell ¥5,241 million from end-March to ¥92,641 million, and net assets dropped ¥10,104 million to ¥26,842 million, cutting the equity ratio to 29.0% from 37.7%. The swing reflects a ¥5,384 million buyback of 2,447,500 own shares resolved on June 8, 2026, dividend payments of ¥3,948 million — including last year's ¥50 commemorative dividend — the quarterly net loss and a ¥464 million decline in accumulated other comprehensive income. Cash and deposits declined ¥5,489 million, while land rose ¥911 million on a business-property acquisition.
Guidance intact, ordinary dividend up ¥20
With the quarter broadly on plan, Nagase left its FY3/2027 guidance unchanged: revenue of ¥67,123 million (+4.6%), operating profit of ¥6,552 million (+9.6%), ordinary profit of ¥6,437 million (+10.5%) and net profit of ¥4,381 million (+10.0%), for EPS of ¥166.41. The annual dividend plan is ¥120 per share — below last year's ¥150 headline, which included a ¥50 commemorative payout, but ¥20 above the ¥100 ordinary portion — and for the first time includes a ¥60 interim dividend to broaden shareholder-return opportunities.
| Metric | Q1 FY3/27 | Q1 FY3/26 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 14.21 | 13.72 | +3.6% |
| Operating profit/loss (¥ billion) | -0.09 | 0.03 | to loss |
| Ordinary profit/loss (¥ billion) | -0.10 | 0.09 | to loss |
| Net profit/loss attrib. to owners (¥ billion) | -0.31 | 0.14 | to loss |
| Basic EPS (¥) | -11.88 | 5.33 | to loss |
| FY3/27 annual dividend plan (¥) | 120.00 | 150.00 | -20.0% |
| FY3/27 operating profit guidance (¥ billion) | 6.55 | 5.98 | +9.6% |
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