Sanrio Q1 Revenue Jumps 20.7% to ¥52.0 Billion as Royalties Outgrow Merchandise

Licensing pulls ahead of the shops

Sanrio Company, Ltd. (TSE: 8136) published consolidated first-quarter results for FY3/2027 on August 10, 2026, covering April 1 to June 30, 2026 under Japanese GAAP. Net sales rose 20.7% to ¥52,035 million, gross profit 17.0% to ¥40,683 million and operating profit 11.1% to ¥22,435 million. Ordinary profit added 12.0% to ¥22,624 million and net profit attributable to shareholders 9.3% to ¥15,516 million.

The split between the group's two revenue streams moved decisively toward licensing. Royalty income from external customers grew 23.0% to ¥26,838 million, while merchandise and other sales added 18.5% to ¥25,197 million — so royalties now supply a little over half of group revenue. Because a royalty carries almost no cost of goods, that mix shift is why gross profit grew faster than sales even as cost of sales rose 36.3% to ¥11,352 million on the merchandise side.

Management credited the breadth of the character portfolio rather than Hello Kitty alone. Pompompurin, marking its 30th anniversary, won the 2026 Sanrio Character Ranking, and the group's social-media following passed 100 million worldwide. Membership of the shared Sanrio+ loyalty programme reached roughly 3.48 million at the end of June, some 220,000 higher than at the end of March.

Japan and Europe carry the quarter

Japan, the largest segment, lifted external revenue 20.2% to ¥29,420 million and segment profit 25.1% to ¥14,915 million. Store traffic rose sharply, licensing held firm across household goods, capsule toys, confectionery and general merchandise, and Sanrio Puroland recorded its highest-ever first-quarter attendance on the back of two seasonal events and a Pompompurin anniversary programme. Harmonyland's 35th-anniversary events lifted sales, though profit there was held back by extra staffing and repairs.

Europe was the fastest-growing region, with revenue up 56.0% to ¥3,346 million and segment profit up 38.8% to ¥855 million, driven by fast-fashion, stationery and toy licensees and a multi-character strategy. South America grew revenue 70.0% to ¥1,073 million on apparel, health and beauty, stationery, accessories and bags, with segment profit up 11.6% to ¥280 million.

Two regions grew sales but lost profit

North America raised revenue only 6.0% to ¥6,133 million and saw segment profit fall 19.9% to ¥2,202 million. Toy and apparel licensing grew strongly, helped by collaborations with other popular characters, but the company ran promotional events with the MLB, NHL, NBA, NFL and MLS to widen its customer reach, and the associated marketing spend outran the revenue gain.

Asia, the second-largest region, grew revenue 19.8% to ¥12,061 million but segment profit slipped 4.9% to ¥5,510 million on higher selling and administrative costs. China extended licensing beyond toys into interiors and kitchenware while expanding its store network and China-specific product range; Korea, Taiwan, Hong Kong, Macau and Southeast Asia all reported growth, with Kuromi, My Melody and Cinnamoroll gaining ground alongside Hello Kitty. Note that every overseas subsidiary closes its books in December, so their contribution to this quarter covers January to March 2026.

Costs, the governance case and the balance sheet

Selling, general and administrative expenses rose 25.3% to ¥18,248 million, comfortably ahead of the 20.7% revenue gain, which is the arithmetic behind operating profit growing only half as fast as sales. Below the operating line the group carried ¥216 million of settlement payments and ¥20 million of costs relating to the special investigation into a former managing director's improper receipt of remuneration; Sanrio filed a damages claim against the individual on July 30, 2026 and says it is rolling out group-wide governance measures. Comprehensive income of ¥16,619 million was 41.4% higher, flattered by ¥1,402 million of positive currency translation.

Total assets closed the quarter at ¥247,713 million, ¥13,029 million higher than at March 31, chiefly on a ¥10,633 million increase in cash and deposits. Liabilities rose ¥5,624 million to ¥84,337 million and net assets ¥7,404 million to ¥163,375 million. The equity ratio eased 0.5 points to 65.9%.

Guidance untouched after a fast start

Sanrio left the forecast published on June 23, 2026 in place. For the year to March 2027 it expects net sales of ¥229,800 million (+18.4%), operating profit of ¥89,500 million (+15.0%), ordinary profit of ¥90,200 million (+13.7%) and net profit of ¥63,800 million (+16.8%), for earnings per share of ¥52.62. The first quarter therefore delivered 22.6% of guided revenue and 25.1% of guided operating profit. The half-year target is ¥107,200 million of sales and ¥42,300 million of operating profit.

The company completed a five-for-one share split on April 1, 2026, and earnings per share of ¥12.80 against ¥11.96 are stated on the post-split basis. The dividend forecast is ¥16.00 per share for FY3/2027, made up of an ¥8.00 interim and an ¥8.00 year-end payment; the ¥69.00 paid for FY3/2026 is a pre-split figure and is not directly comparable.

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.