Sanrio shares plunge 18% after Hello Kitty owner reports first-quarter results
Sanrio, the company behind the Hello Kitty brand, has seen its shares rise steadily in recent months. But the stock fell 18% in Tokyo trading on Wednesday after the company reported results for its first fiscal quarter. Revenue for the quarter ended in June reached ¥52.04 billion, equivalent to $326 million, up 20.7% from a year earlier. Operating profit rose 11.1% to ¥22.44 billion. Sanrio kept its full-year guidance unchanged. For the fiscal year ending in March 2027, the company expects revenue to rise 18.4% year over year to ¥229.8 billion and operating profit to increase 15% to ¥89.5 billion. Morningstar said the quarterly results were broadly in line with its previous estimates and that it was maintaining its fiscal 2026 earnings expectations and long-term outlook. The research firm noted that Sanrio shares had gained about 55% since the company delayed releasing its full-year results for the previous fiscal year in June, and said the stock had reached a reasonable valuation range. In Japan, the continued popularity of Sanrio's character intellectual property helped drive a 43.5% year-over-year increase in contribution profit. The rollout of original products and improved performance at physical stores supported merchandise sales growth. Broad licensing across multiple IP categories also improved the profitability of individual licensing partners. In the Americas, the impact of taxes is still being absorbed, but sales are showing signs of recovery. Higher toy and apparel volumes, along with broader applications for Hello Kitty and Sanrio's other IP, supported regional performance. Sanrio is also expanding into gaming. It plans to release a game for the Nintendo Switch in October and a mobile game in 2027. Morningstar, however, said gaming is unlikely to become a significant source of profit growth for the company in the short term.
Revenue for the quarter ended in June reached ¥52.04 billion, equivalent to $326 million, up 20.7% from a year earlier. Operating profit rose 11.1% to ¥22.44 billion.
Sanrio kept its full-year guidance unchanged. For the fiscal year ending in March 2027, the company expects revenue to rise 18.4% year over year to ¥229.8 billion and operating profit to increase 15% to ¥89.5 billion.
Morningstar said the quarterly results were broadly in line with its previous estimates and that it was maintaining its fiscal 2026 earnings expectations and long-term outlook. The research firm noted that Sanrio shares had gained about 55% since the company delayed releasing its full-year results for the previous fiscal year in June, and said the stock had reached a reasonable valuation range.
In Japan, the continued popularity of Sanrio's character intellectual property helped drive a 43.5% year-over-year increase in contribution profit. The rollout of original products and improved performance at physical stores supported merchandise sales growth. Broad licensing across multiple IP categories also improved the profitability of individual licensing partners.
In the Americas, the impact of taxes is still being absorbed, but sales are showing signs of recovery. Higher toy and apparel volumes, along with broader applications for Hello Kitty and Sanrio's other IP, supported regional performance.
Sanrio is also expanding into gaming. It plans to release a game for the Nintendo Switch in October and a mobile game in 2027. Morningstar, however, said gaming is unlikely to become a significant source of profit growth for the company in the short term.