Sanrio shares plunge 18% after quarterly results despite Hello Kitty momentum
Sanrio, the parent company of Hello Kitty, reported fiscal first-quarter results on Wednesday in Tokyo, sending its shares down 18% after several months of gains. For the quarter ended in June, revenue rose 20.7% year over year to 52.04 billion yen ($326 million), while operating profit increased 11.1% to 22.44 billion yen. Sanrio left its full-year guidance unchanged. For the fiscal year ending in March of the following year, the company expects revenue to rise 18.4% year over year to 229.8 billion yen and operating profit to increase 15% to 89.5 billion yen. Morningstar said the quarterly results were broadly in line with expectations and maintained its view of Sanrio's fiscal 2026 results and longer-term outlook. The research firm said Sanrio shares had risen about 55% since June, when the company delayed the release of its full-year results, and that the stock had reached fair value. In Japan, the popularity of Sanrio's intellectual-property portfolio continued to rise, driving a 43.5% year-over-year increase in profit contribution. The launch of internally developed products and improved performance at existing stores supported merchandise sales. Sanrio's licensing business also increased the profit generated per licensee through broader use of its intellectual-property characters. In mainland China, both new and existing stores performed steadily. In the Americas, Sanrio said sales were showing signs of recovery, while the company continued to deal with the impact of tariffs. Toy and apparel sales grew, and the expanding use of Hello Kitty and related family characters across more settings supported overall performance. Sanrio is expanding into gaming. It plans to launch a game for the Switch platform in October and a mobile game in 2027. Morningstar, however, expects the gaming business to be unlikely to become a significant source of profit growth in the short term. A March 25, 2026, photo from Osaka, Japan, showed Hello Kitty plush toys in a claw machine.
For the quarter ended in June, revenue rose 20.7% year over year to 52.04 billion yen ($326 million), while operating profit increased 11.1% to 22.44 billion yen.
Sanrio left its full-year guidance unchanged. For the fiscal year ending in March of the following year, the company expects revenue to rise 18.4% year over year to 229.8 billion yen and operating profit to increase 15% to 89.5 billion yen.
Morningstar said the quarterly results were broadly in line with expectations and maintained its view of Sanrio's fiscal 2026 results and longer-term outlook. The research firm said Sanrio shares had risen about 55% since June, when the company delayed the release of its full-year results, and that the stock had reached fair value.
In Japan, the popularity of Sanrio's intellectual-property portfolio continued to rise, driving a 43.5% year-over-year increase in profit contribution. The launch of internally developed products and improved performance at existing stores supported merchandise sales. Sanrio's licensing business also increased the profit generated per licensee through broader use of its intellectual-property characters.
In mainland China, both new and existing stores performed steadily.
In the Americas, Sanrio said sales were showing signs of recovery, while the company continued to deal with the impact of tariffs. Toy and apparel sales grew, and the expanding use of Hello Kitty and related family characters across more settings supported overall performance.
Sanrio is expanding into gaming. It plans to launch a game for the Switch platform in October and a mobile game in 2027. Morningstar, however, expects the gaming business to be unlikely to become a significant source of profit growth in the short term.
A March 25, 2026, photo from Osaka, Japan, showed Hello Kitty plush toys in a claw machine.