Revenue barely moved and every profit line fell
Golf Do Co., Ltd. (NSE: 3032), which runs the Golf Do! chain of used golf equipment stores and is listed on the Nagoya Stock Exchange rather than in Tokyo, published consolidated results for the three months to June 30, 2026 on August 13, 2026 under Japanese GAAP. Revenue rose 1.8% to ¥1,612 million, but operating profit fell 18.7% to ¥57 million, ordinary profit 6.8% to ¥67 million and profit attributable to owners of the parent 30.9% to ¥33 million. Basic earnings per share were ¥6.79 against ¥9.53, diluted earnings per share ¥6.39 against ¥9.21, and comprehensive income ¥35 million, down 20.5%. A two-for-one stock split took effect on November 1, 2025, and the prior-year per-share figures are restated as though it had happened at the start of that year, so the per-share comparison is like for like.
The gross margin improved; the cost base ate the gain
This is not a pricing problem. Cost of sales actually fell to ¥946 million from ¥970 million even as revenue rose, because the mix moved out of the low-margin wholesale business and into the directly-operated stores, so gross profit rose 8.7% to ¥666 million and the gross margin widened from 38.7% to 41.3%; both ratios are computed here from the filing's own income statement, which does not state them. What consumed the gain was operating cost. Selling, general and administrative expenses rose 12.2% to ¥609 million, an increase of ¥66 million against only ¥53 million of extra gross profit. The company names three drivers: higher part-time wages, because it hired part-timers to cover a shortage of full-time staff; higher credit-card and e-commerce-mall commissions; and rent and depreciation on the DODO GOLF indoor practice sites. Depreciation rose to ¥38.6 million from ¥30.8 million, and goodwill amortisation, ¥1.3 million a year earlier, was nil.
The whole decline sits in two lines that are not reported segments
The segment note reconciles this exactly, and the answer is not in the reported businesses. The three reported segments together earned ¥177.0 million, up from ¥171.1 million. But the unreported Other category, which holds the unmanned indoor practice business, widened its loss to ¥17.4 million from ¥7.0 million, and unallocated corporate costs widened to ¥101.8 million from ¥93.1 million. Those three movements — up ¥5.9 million, down ¥10.4 million and down ¥8.7 million — sum to the ¥13.3 million by which operating profit fell. DODO GOLF, the unmanned indoor practice format launched in June 2025, opened its fifth site, Kita-Yono Kitaguchi, in May; on these numbers it is being built out, not harvested.
Within the reported three, Directly-Operated Stores grew revenue 11.1% to ¥1,336 million and profit 4.8% to ¥155 million, helped by two franchise outlets — Fukiage, and Yamaguchi Hofu, which a subsidiary had been running — converting to company-operated stores on April 1, 2026; directly-operated all-store sales rose 13.0% and same-store sales 8.3%. Franchise revenue fell 17.3% to ¥121 million on a smaller store count and weaker counter sales, yet its profit rose 18.9% to ¥25 million because royalty income held up on online selling, including the Mercari Shops listings started in January 2026; franchise all-store sales fell 5.6% and same-store sales 0.9%. Sales & Wholesale, largely the US subsidiary, fell 32.0% to ¥189 million and swung to a segment loss of ¥4 million from a profit of ¥0 million, the weak yen keeping its exports to Japan limited while it leaned on US domestic wholesale, online selling and resale of used clubs sourced from Japan. At June 30, 2026 the chain was 26 directly-operated and 42 franchise stores, 68 in all, with chain-wide all-store sales up 3.5% and same-store sales up 3.7%.
A subsidy cushioned ordinary profit; tax took it back
Ordinary profit fell only 6.8%, to ¥67 million, against the 18.7% drop at the operating line, and the gap is essentially one item. Non-operating income more than doubled, to ¥17.7 million from ¥7.4 million, of which ¥12.3 million was subsidy income with no prior-year counterpart — this is where the refunds of United States reciprocal tariffs and the US domestic economic support payments booked by the US subsidiary land. Interest expense rose to ¥7.0 million from ¥5.6 million. Below the pre-tax line the direction reverses: on pre-tax profit of ¥67.8 million against ¥72.8 million, total tax expense rose to ¥34.8 million from ¥25.0 million, an effective rate of 51.3% against 34.3%. The increase is entirely deferred — the deferred tax charge was ¥27.4 million against ¥9.5 million, while current tax fell to ¥7.4 million from ¥15.5 million. That, rather than trading, is why the bottom line fell 30.9% when ordinary profit fell 6.8%.
A thin balance sheet, and an upgrade the tanshin does not explain
Total assets rose ¥64 million to ¥3,946 million, with inventories adding ¥50 million and tangible fixed assets ¥50 million. Liabilities rose ¥42 million to ¥3,045 million: accounts payable fell ¥171 million and the bonus provision ¥34 million, but short-term borrowings rose ¥170 million and long-term borrowings ¥68 million. Net assets rose ¥22 million to ¥900 million and shareholders' equity to ¥846 million from ¥825 million, lifting the equity ratio to 21.5% from 21.3% — still thin, with liabilities more than three times equity — while book value per share rose to ¥174.10 from ¥169.82. No quarterly cash flow statement is prepared, so the cash cost of the inventory build and the two store conversions is not visible in this filing.
Both the full-year forecast and the dividend forecast were revised on August 13, 2026, superseding the figures published on May 13, 2026. FY3/2027 guidance is now revenue of ¥7,000 million (+13.2%), operating profit of ¥160 million (+61.5%), ordinary profit of ¥130 million (+43.9%) and net profit of ¥87 million (+29.2%), for earnings per share of ¥17.89, while the dividend forecast is ¥4.00 per share, all at the year-end, against ¥3.00 for FY3/2026. The tanshin carries none of the reasoning: it does not reproduce the superseded figures and simply refers the reader to a separate release issued the same day, which also changed the shareholder-benefit programme. What the tanshin does show is the arithmetic the upgrade has to survive. The first quarter delivered 23.0% of the guided revenue but only about 36% of the guided operating profit, and the shortfall sits in a cost base and an investment programme that are not obviously seasonal.
| Metric | Q1 FY3/2027 | Q1 FY3/2026 | Change |
|---|---|---|---|
| Revenue (¥ million) | 1,612 | 1,584 | +1.8% |
| Gross profit (¥ million) | 666 | 613 | +8.7% |
| Gross margin | 41.3% | 38.7% | +2.6 pt |
| SG&A expenses (¥ million) | 609 | 542 | +12.2% |
| Operating profit (¥ million) | 57 | 71 | −18.7% |
| Operating margin | 3.6% | 4.5% | −0.9 pt |
| Ordinary profit (¥ million) | 67 | 72 | −6.8% |
| Net profit attrib. to owners of parent (¥ million) | 33 | 47 | −30.9% |
| Comprehensive income (¥ million) | 35 | 44 | −20.5% |
| EPS (¥) | 6.79 | 9.53 | −28.8% |
| Directly-Operated Stores — revenue (¥ million) | 1,336 | 1,202 | +11.1% |
| Directly-Operated Stores — segment profit (¥ million) | 155 | 148 | +4.8% |
| Franchise — revenue (¥ million) | 121 | 146 | −17.3% |
| Franchise — segment profit (¥ million) | 25 | 21 | +18.9% |
| Sales & Wholesale — revenue (¥ million) | 189 | 278 | −32.0% |
| Sales & Wholesale — segment profit (¥ million) | −4 | 0 | profit to loss |
| Total assets (¥ million) | 3,946 | 3,882 | +1.7% |
| Net assets (¥ million) | 900 | 878 | +2.5% |
| Shareholders' equity (¥ million) | 846 | 825 | +2.5% |
| Equity ratio | 21.5% | 21.3% | +0.2 pt |
| FY3/2027 guidance — revenue (¥ million) | 7,000 | — | +13.2% |
| FY3/2027 guidance — operating profit (¥ million) | 160 | — | +61.5% |
| FY3/2027 guidance — ordinary profit (¥ million) | 130 | — | +43.9% |
| FY3/2027 guidance — net profit (¥ million) | 87 | — | +29.2% |
| FY3/2027 guidance — EPS (¥) | 17.89 | — | n.m. |
| Annual dividend per share (¥) | 4.00 | 3.00 | +33.3% |
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.