Istyle's Q1 profit beats forecast, driven by marketing solutions

Istyle Inc. announced robust operating profit in the first quarter of the fiscal year ending June 2026, surpassing its full-year forecast due to the strong performance of its Marketing Solution Business and effective group-wide cost management. The high-margin Marketing Solution Business notably propelled consolidated operating profit, benefiting from increased sales promotion services within the Retail Business and accelerated growth in solutions like online advertising through synergistic effects. While new data consulting services are beginning to yield tangible results, direct earnings contributions remain limited, with efforts ongoing to expand the consulting workforce.

Looking ahead to the second quarter, Istyle anticipates a quarter-on-quarter decline in operating profit, attributed to strategic upfront investments. These include costs for the new "Tokyo Beauty Week" real event in November, promotion expenses for the annual "@cosme BEAUTY DAY" sales event in December, and ongoing expenses for the new Hong Kong flagship store, "@cosme HONG KONG," scheduled to open in December following Q2.

The company also provided updates on its Retail and Global Businesses. In-store sales, which saw a decline in July primarily from East Asian travelers, have recovered since August, with inbound traffic surging again in October due to China's National Day. The first overseas flagship store, "@cosme HONG KONG," is set to open on December 5, 2025, featuring over 500 domestic and international brands. Additionally, the AI-powered review analysis tool "@cosme Copilot" is scheduled for an official launch in January 2026, with test releases already underway.