Sogo Shoken has cut its full-year operating profit forecast to 210 million yen from 355 million yen for the year ending July 2026, saying demand for New Year's greeting-card printing, or nengajo, is shrinking faster than it expected. Sales guidance was lowered to 15,700 million yen from 16,300 million yen, while net profit attributable to owners of parent was cut to 270 million yen from 335 million yen. The company also said selling, general and administrative expenses rose more than planned because security investment was brought forward and spending on people was stepped up.
| Metric | Previous forecast | Revised forecast | Prior-year actual |
|---|---|---|---|
| Net sales | 16,300 million yen | 15,700 million yen | 16,236 million yen |
| Operating profit | 355 million yen | 210 million yen | 351 million yen |
| Ordinary profit | 435 million yen | 350 million yen | 431 million yen |
| Net profit attributable to owners of parent | 335 million yen | 270 million yen | 319 million yen |
| EPS | 111.69 yen | 90.02 yen | 106.57 yen |
That makes this more than a weak quarter. The filing says the key problem is structural, not simply timing: nengajo demand is declining at a pace that exceeded the company's original assumption, even though promotional-related business continued to trend solidly. Sogo Shoken's updated forecast now points to lower sales, operating profit, ordinary profit and net profit than the plan it published in September 2025.
The quarterly report released the same day shows where the pressure is coming from. For the nine months to April 30, sales fell 2.2% to 13,579 million yen and operating profit dropped 31.4% to 670 million yen. The company said promotional work benefited from new-store openings and sale campaigns at major clients, supporting orders for flyers, in-store promotion and BPO services, while catalog work and local-government web and publicity projects also grew. But in the nengajo-related business, order volumes fell despite new work tied to online greeting-card applications.
Costs then did the rest. In the guidance revision notice, Sogo Shoken said higher expenses reflected earlier security investment to strengthen information management and proactive human investment for longer-term growth. The quarterly filing adds that it was also spending on generative AI, security measures, and better employee treatment to support hiring and engagement. That helps explain why the cut to operating profit is far steeper than the trim to sales guidance.
What remains unclear is the exact split between the revenue shortfall and the extra spending, because the company did not quantify each factor's impact on the downgrade. It did, however, note that its earnings are seasonal: the second quarter is typically stronger because greeting-card printing and year-end commercial inserts concentrate there, while the third and fourth quarters are weighed down by fixed costs in the nengajo business. The result is a full-year reset rooted in both demand erosion and a higher cost base, rather than a one-quarter miss.