Renaissance, Incorporated (2378): FY2025 Results Summary — Higher Sales but a Net Loss on Club Closures and Impairment

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

RENAISSANCE, INCORPORATED (TSE Prime: 2378) reported net sales of 64,933 million yen for the fiscal year ended March 31, 2026, up 1.9% year on year, as the number of registered members and membership unit prices rose in the sports club business and Kaede no Kaze Co., Ltd. was consolidated. Operating income fell 19.6% to 1,565 million yen and ordinary income fell 35.1% to 795 million yen, while the bottom line swung to a net loss attributable to owners of parent of 2,106 million yen from net income of 766 million yen a year earlier. The company decided to close a total of 6 sports clubs, mainly in central Tokyo, and recorded impairment losses covering 38 facilities. Alongside the results, it revised the 2024-2027 Medium-Term Management Plan and formulated a new 2026-2030 Medium-Term Management Plan.

Consolidated Results (Full-Year Actual)

Sales increased due to an increase in the number of registered members and an increase in the unit price of members in the sports club business, as well as the consolidation of Kaede no Kaze Co., Ltd. Personnel expenses increased due to an increase in salary levels, and equipment expenses such as depreciation and amortization increased due to the merger with Oasis. The company attributes the shortfall against its earnings forecast mainly to sluggish growth in the home fitness business and the recording of an extraordinary loss.

Item (millions of yen)	Fiscal year ended March 2026	Fiscal year ended March 2025	Year-on-Year
Sales	64,933	63,737	+1.9%
Operating Income	1,565	1,946	▲19.6%
Ordinary Income	795	1,224	▲35.1%
Net income attributable to owners of parent	▲ 2,106	766	–

Against the revised earnings forecast, all profit lines came in below plan.

Item (millions of yen)	Fiscal year ended March 2026 (Actual)	Revised earnings forecast	Compared with the revised earnings forecast
Sales	64,933	66,000	▲1.6%
Operating Income	1,565	1,700	▲7.9%
Ordinary Income	795	900	▲11.7%
Net income attributable to owners of parent	▲ 2,106	500	–

Closure of Unprofitable Facilities and Impairment of Fixed Assets

The business environment in the sports club business has changed significantly, including increases in personnel costs and other costs, and profitability has deteriorated mainly in stores located in central Tokyo where the ratio of rent to net sales is large. The company decided to close a total of 6 stores, recording losses arising from store closures of approximately 1.6 billion yen and impairment losses arising from changes in the estimation of asset retirement obligations of approximately 800 million yen. Separately, 38 facilities in total (including facilities that have been closed) were targeted, with impairment losses arising from facilities with declining profitability of approximately 1.1 billion yen. The company states that measures were completed for facilities with signs of impairment as of the end of the current consolidated fiscal year that are not expected to recover investment.

Segment Results

Total Sales of Sports Facilities rose 2.8% to 55,145 million yen, accounting for 84.9% of total sales. Within this, the Fitness Division Total was 29,200 million yen (+2.1%) and the School sector total was 19,963 million yen (+4.5%), led by Tennis Schools at 4,499 million yen (+6.4%) and Swimming School at 13,683 million yen (+4.5%). Nursing rehabilitation grew 22.1% to 2,467 million yen, while Home Fitness declined 18.6% to 3,938 million yen. From the current fiscal year, due to the merger of Sports Oasis Inc. and organizational changes, the reporting categories and the businesses included in each category have been partially changed, and the prior-year figures have been reclassified accordingly.

Consolidated Sales by Business (millions of yen)	Fiscal year ended March 2025	Composition ratio	Fiscal year ended March 2026	Composition ratio	Year-on-Year
Fitness Division Total	28,603	44.9%	29,200	45.0%	+2.1%
Swimming School	13,093	20.5%	13,683	21.1%	+4.5%
Tennis Schools	4,227	6.6%	4,499	6.9%	+6.4%
Other Schools	1,787	2.8%	1,781	2.7%	▲0.4%
School sector total	19,108	30.0%	19,963	30.7%	+4.5%
Total for shops	789	1.2%	819	1.3%	+3.8%
Total other income (rental lockers, etc.)	5,129	8.1%	5,161	8.0%	+0.6%
Total Sales of Sports Facilities	53,631	84.1%	55,145	84.9%	+2.8%
Health Promotion in Communities and Corporations	3,246	5.1%	3,382	5.2%	+4.2%
Nursing rehabilitation	2,021	3.2%	2,467	3.8%	+22.1%
Home Fitness	4,837	7.6%	3,938	6.1%	▲18.6%
Total Sales	63,737	100.0%	64,933	100.0%	+1.9%

Membership and Existing Club Trends

The number of registered members for all membership categories increased from the same period of the previous fiscal year. Total Membership reached 442,085 as of March 31, 2026, up 1.7%. From the consolidated fiscal year under review, the figures do not include online members but do include the number of Renaissance Vietnam sports club members. For existing clubs (total of existing Renaissance stores and former Oasis stores), the unit price for members rose from 9,972 yen to 10,193 yen on a year-to-date basis, while the withdrawal rate was 3.2% versus 3.1% in the prior year.

Number of members by sports club business sector	As of March 31, 2025	Composition ratio	As of March 31, 2026	Composition ratio	Year-on-Year
Fitness Total	248,727	57.2%	253,249	57.3%	+1.8%
Swimming school	127,225	29.3%	129,292	29.3%	+1.6%
Tennis Schools	34,589	8.0%	35,115	7.9%	+1.5%
Other Schools	24,350	5.6%	24,429	5.5%	+0.3%
Total Schools	186,164	42.8%	188,836	42.7%	+1.4%
Total Membership	434,891	100.0%	442,085	100.0%	+1.7%

Balance Sheet and Cash Flows

Total assets stood at 57,043 million yen at the end of March 2026, up 2.9%, with current assets of 14,112 million yen (+12.1%) reflecting an increase in cash and deposits. Total liabilities rose 9.3% to 47,354 million yen on increases in short-term borrowings, long-term debt and asset retirement obligations, while total net assets decreased 20.0% to 9,689 million yen. Cash flows from operating activities were 4,122 million yen versus 3,510 million yen a year earlier, cash flows from investing activities were ▲ 4,399 million yen, and financing activities provided 1,190 million yen. Cash and cash equivalents at the end of the year were 8,570 million yen, up from 7,680 million yen.

Outlook for the Fiscal Year Ending March 31, 2027

Net sales are expected to increase 4.7% year on year due to factors such as an increase in the number of existing store members in the sports club business and an increase in the number of 7 facilities, including Atrio Doe Next, and full-year contributions from Kaede no Kaze and 5 facilities, My Rehab, in the long-term care rehabilitation business. Operating income is expected to increase 15.0% year on year as the company strengthens its structure for future growth in the areas surrounding sports clubs and the home fitness business.

Item	Fiscal year ending March 2026 (Actual)	Fiscal year ending March 2027 (Forecast)	YoY	Change
Net Sales (millions of yen)	64,933	68,000	+4.7%	+3,066
Operating income (millions of yen)	1,565	1,800	+15.0%	+234
Ordinary income (millions of yen)	795	900	+13.2%	+104
Profit attributable to owners of parent (millions of yen)	▲ 2,106	500	ー	+2,606
Net income per share (yen)	▲112.47	25.38	ー	ー
Dividends per share (yen)	13.0 (interim 4.0/year-end 9.0)	13.0 (interim 4.0/year-end 9.0)	ー	ー
Operating income margin	2.4%	2.6%	ー	ー

Shareholder Returns

Dividends per share for the fiscal year ended March 31, 2026 were 13.0 yen (interim 4.0 yen, year-end 9.0 yen). For the fiscal year ending March 31, 2027, the company forecasts an unchanged 13.0 yen per share (interim 4.0 yen, year-end 9.0 yen).

Medium-Term Management Plan and Topics

Based on the progress of business performance to date, the company revised the 2024-2027 Medium-Term Management Plan and newly established the 2026-2030 Medium-Term Management Plan, positioning it as a roadmap from turnaround to renewed growth. The first half (FY 2026 to FY 2027) will be spent recovering and strengthening its financial position, and the second half (FY 2028 to FY 2030) will be spent reforming its business portfolio. In the sports club business, the company merged with Sports Oasis in April, implemented price revisions in October, opened 2 new stores by taking over facilities of other companies, and decided to acquire 8 facilities operated by Tokyu Sports System in July 2026. In the nursing care and medical services business, Kaede no Kaze Co., Ltd. became a 100% subsidiary effective December, adding 36 day care facilities (13 directly managed and 23 FC), and 5 rehabilitation-specialized facilities “Myreha” will be acquired from Leven Community Co., Ltd. effective April 2026. As of the end of March 2026, the group operated 330 facilities in total, with 329 facilities in Japan and 1 overseas.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.