Sanrio (8136): FY2025 Results Summary — Record Sales and Profit as the Character Portfolio Broadens

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

Note on fiscal-year labels: this article covers the fiscal year ended March 31, 2026, which Sanrio Company, Ltd. labels “FY3/2026” in its presentation. Our site classifies the most recent completed fiscal year as FY2025, so the title uses that label while the body, tables and segment figures keep the labels used in the source material. The presentation also notes that the reporting period covers April 2025 to March 2026 for Japan and January 2025 to December 2025 for overseas operations.

Sanrio reported net sales of 194,088 million yen for FY3/2026, up 33.9% year on year, and adjusted operating profit of 78,453 million yen, up 41.0%. The company describes this as a fifth consecutive year of growth for both net sales and adjusted operating profit, with both reaching historical highs. Operating profit rose 50.3% to 77,859 million yen and net profit attributable to owners of parent rose 30.9% to 54,608 million yen. For FY3/2027 the company forecasts net sales of 229,800 million yen (+18.4%) and adjusted operating profit of 88,800 million yen (+13.2%).

Consolidated Results (Full-Year Actual)

The presentation attributes the increase in Japan to ongoing exposure through owned media and licensee promotions, while the expansion of the store network in mainland China and advancements in fast fashion in Europe contributed to earnings growth. Gross profit margin improved 1.5pt to 77.3% and the operating profit margin improved 4.3pt to 40.1%. ROE declined 7.0pt to 41.6%. Figures are stated in millions of yen and are rounded down to the nearest one million yen; percentages are rounded to the nearest tenth of a percent.

Item (JPY: Million)	FY3/2026	FY3/2025	Change
Sales	194,088	144,904	+33.9%
Gross Profit	150,062	109,899	+36.5%
Gross Profit Margin	77.3%	75.8%	+1.5pt
Operating Profit	77,859	51,806	+50.3%
OP Margin	40.1%	35.8%	+4.3pt
Adjusted Operating Profit	78,453	55,644	+41.0%
EBITDA	80,731	54,107	+49.2%
EBITDA Margin	41.6%	37.3%	+4.3pt
Ordinary Profit	79,335	53,453	+48.4%
Net Profit attributable to owners of parent	54,608	41,731	+30.9%
ROE	41.6%	48.6%	(7.0pt)
EPS (Yen)	45.33	35.32	+10.01

The company notes that it conducted a 5 for 1 common stock split on April 1, 2026, and that the calculation of net profit per share assumes that the stock split was conducted at the beginning of the previous consolidated fiscal year. Adjusted operating profit is a proprietary indicator defined by the company, referring to operating profit excluding the impact of consolidation adjustments arising from the difference in fiscal year-ends between the parent company in Japan and overseas subsidiaries.

Segment Results

Sanrio reports by region: Japan, Europe, Americas and Asia, with an Adjustment line. Alongside sales and adjusted operating profit, the company discloses royalty revenue and “contribution profit,” a Sanrio-specific indicator calculated by adding royalty payments made to headquarters back to the operating profit of overseas subsidiaries. From Q2 FY3/2026 contribution profit is presented net of consolidation adjustments related to differences in fiscal periods, and past figures are retrospectively restated.

Item / Segment (JPY: Million)	FY3/2026	FY3/2025	YoY%
Sales	194,088	144,904	+33.9%
Sales — Japan	148,250	113,009	+31.2%
Sales — Europe	11,721	6,383	+83.6%
Sales — Americas	31,062	29,461	+5.4%
Sales — Asia	45,539	28,003	+62.6%
Sales — Adjustment	(42,486)	(31,953)	–
Royalty	96,424	70,738	+36.3%
Royalty — Japan	62,767	45,368	+38.4%
Royalty — Europe	11,392	6,110	+86.4%
Royalty — Americas	28,226	26,707	+5.7%
Royalty — Asia	25,670	18,077	+42.0%
Royalty — Adjustment	(31,632)	(25,525)	–
Adjusted Operating Profit	78,453	55,644	+41.0%
Adjusted OP — Japan	53,843	36,602	+47.1%
Adjusted OP — Europe	2,328	1,600	+45.5%
Adjusted OP — Americas	10,494	10,955	(4.2%)
Adjusted OP — Asia	15,515	9,068	+71.1%
Adjusted OP — Adjustment	(3,728)	(2,581)	–
Contribution Profit	78,453	55,644	+41.0%
Contribution Profit — Japan	20,234	11,722	+72.6%
Contribution Profit — Europe	7,360	3,450	+113.3%
Contribution Profit — Americas	22,967	22,646	+1.4%
Contribution Profit — Asia	28,313	17,900	+58.2%
Contribution Profit — Adjustment	(422)	(75)	–

Within Japan, the company breaks sales down into Product Sales, Royalties, Sanrio Entertainment (the theme park business) and Other. Sanrio attributes the substantial increase in sales and profit in the domestic Product Sales and License businesses to improved experience value with the opening of the Harajuku flagship store in December 2025, the strategic development of Sanrio original products, and the use of multiple Sanrio characters together. “Other” includes SG&A expenses and the elimination of master license fees paid by overseas subsidiaries to the head office, as well as domestic consolidated subsidiaries.

Japan breakdown (JPY: Million)	FY3/2026	FY3/2025
Sales — Product Sales	67,881	50,744
Sales — Royalties	31,255	20,055
Sales — Sanrio Entertainment	19,150	16,553
Sales — Other	29,963	25,655
Sales — Japan total	148,250	113,009
Contribution Profit — Product Sales	13,386	9,364
Contribution Profit — Royalties	27,746	16,890
Contribution Profit — Sanrio Entertainment	3,009	2,990
Contribution Profit — Other	△ 23,906	△ 17,522
Contribution Profit — Japan total	20,234	11,722

For the Americas, the company states that brand momentum remained favorable despite slowing performance growth due to delays and stoppages in production and shipments by some licensees as a result of the U.S. tariffs. In Asia, Product Sales performance in mainland China was strong at new and existing stores, mainly in first-tier cities, while merchandise licensing continued to be strong, particularly for toys. In Europe, global fast fashion brands and other apparel contributed positively to business performance. The presentation notes 59 stores in mainland China as of the end of December 2025 (5 direct stores and 54 FC stores), an increase of 31 stores year on year.

Balance Sheet

Total assets rose 15.9% to 234,684 million yen and net assets rose 44.9% to 155,971 million yen, with the company citing an increase of 39.1 billion yen in retained earnings. Interest-bearing debt fell 65.4% to 13,938 million yen and net cash, defined as cash and deposits less interest-bearing debts, rose 41.7% to 111,495 million yen.

Item (JPY: Million)	FY3/2026	FY3/2025	YoY(%)
Current assets	168,567	151,698	+11.1%
Cash and deposits	125,433	118,976	+5.4%
Non-current assets	66,117	50,707	+30.4%
Total assets	234,684	202,406	+15.9%
Total liabilities	78,713	94,798	（17.0%）
Interest-bearing debt	13,938	40,291	（65.4%）
Net assets	155,971	107,608	+44.9%
Net cash	111,495	78,685	+41.7%
Equity ratio	66.4%	52.9%	13.5pt

FY3/2027 Forecast

Sanrio states that, building on its global business foundation, it aims to further accelerate brand momentum and achieve a sixth consecutive year of revenue and profit growth, along with a new record-high profit. Exchange rate assumptions move from 150 yen/USD, 169 yen/EUR and 20.9 yen/CNY in FY3/2026 to 155 yen/USD, 185 yen/EUR and 22.5 yen/CNY in FY3/2027.

Consolidated PL (JPY: Million)	FY3/2027 (Expected)	FY3/2026 (Actual)	YoY
Sales	229,800	194,088	+18.4%
Gross profit	178,600	150,062	+19.0%
Gross Profit Margin	77.7%	77.3%	+0.4pt
Operating profit	89,500	77,859	+15.0%
OP Margin	38.9%	40.1%	-1.2pt
Adjusted Operating Profit	88,800	78,453	+13.2%
Ordinary profit	90,200	79,335	+13.7%
Net profit attributable to owners of parent	63,800	54,608	+16.8%

By region, the company forecasts higher sales in all four segments for FY3/2027. In Japan, investments made by the Japan HQ to expand global character exposure, along with higher personnel costs to strengthen the business foundation, are expected to weigh on contribution profit, which is forecast to decline 3.8%. For the Americas, the company expects the negative impact of tariffs to continue along with an increase in expenses for strengthening and expanding the business base. In Asia, the company plans to open roughly 20 new stores in the Product Sales Business, mainly in Tier 1 and Tier 2 cities.

Segment (JPY: Million)	Sales FY3/2027 Forecast	Sales YoY	Contribution Profit FY3/2027 Forecast	Contribution Profit YoY
Japan	172,167	+16.1%	19,456	-3.8%
Americas	33,820	+8.9%	24,265	+5.7%
Asia	57,074	+25.3%	35,240	+24.5%
Europe	14,811	+26.4%	10,484	+42.4%

Shareholder Returns

Dividends paid rose 16 yen to 69 yen per share, with the dividend payout ratio at 30.4% versus 30.0% a year earlier, and the total payout ratio at 58.3% versus 30.1%. In the Q&A section of the presentation, the company states that its basic policy for shareholder returns is to provide stable and consistent dividends, and that its financial policy targets a dividend payout ratio of at least 30%. It adds that it will conduct a comprehensive review of progress under the growth investment framework in its medium-term management plan, which calls for 50 billion yen or more through FY3/2027, and that after that review it intends to consider shareholder returns of up to 30 billion yen as one important option if it is unable to identify a sufficient number of attractive investment opportunities. The company also says its policy of prioritizing growth investments remains unchanged and that it will consider opportunistic share buybacks using excess capital.

Item	FY3/2026	FY3/2025	Change
Dividends Paid (Yen)	69	53	+16
Dividend payout ratio	30.4%	30.0%	+0.4pt
Total Payout Ratio	58.3%	30.1%	+28.2pt

Long-Term Vision and Medium-Term Plan Progress

Sanrio says its disclosures based on the medium-term management plan extend through FY3/2027, and that it intends to shift from formulating medium-term management plans to implementing strategies and measures in a more flexible and agile manner to achieve its FY3/2035 long-term vision, announced in May 2025. The company describes progress on the plan’s three approaches as generally on track. In the Q&A it states that it has consistently regarded its stock price as a key management indicator and that its long-term vision through FY3/2035 includes a target market capitalization of 5 trillion yen.

On the character portfolio, the presentation shows Hello Kitty at 37.3% of the FY3/2026 mix versus 38.6% in FY3/2025, with a wide range of Sanrio characters at 16.2% versus 16.0% and other Sanrio characters at 46.5% versus 45.4%; the composition is calculated based on gross profit from the Product Sales business and the License business in Japan and overseas, with FY3/2025 data retrospectively restated. Regional market share targets by FY3/2035 are given as up to +5pt from approximately 19% in Japan, up to +5pt from approximately 16% in China, 10% from approximately 4% in North America, and up to +5pt from approximately 1% in Europe.

On the medium-term investment framework, the company shows an allocation through FY3/2027 of 10 billion yen for marketing, 10 billion yen for game development, 3 billion yen for edutainment and digital areas, 1.5 billion yen for Sanrio+, and 4 billion yen for systems, for a total of 30 billion yen in organic investments, plus 50 billion yen or more for inorganic investments. Progress for the period FY3/2025 to FY3/2026 is shown as approximately 15 billion yen in total organic investments and several billion yen of total investment on the inorganic side, including investments in ClaN, Brave Group and IG Port and making Gugenka a subsidiary.

On the new game business, the company launched its own game brand, Sanrio Games, and plans to release a total of 10 titles or so by the end of the fiscal year ending March 31, 2029. The first title is shown as Hello Kitty Party Land, a party game with a launch date of October 29th, 2026 in Japan and overseas. Because launches are expected in the second half of FY3/2027, the company says it does not expect a contribution to business performance until the following fiscal year.

Governance Topic Disclosed with the Results

The presentation opens with an explanation of the Special Investigation Committee’s findings regarding suspected inappropriate compensation received by a former managing director. The company states that the total amount in question was US$1,682,018 (approximately ¥252,302,700, calculated at an exchange rate of USD1 = JPY150), including a cost of living adjustment bonus, and that the financial benefits provided have been recorded as an expense of the U.S. subsidiary for the respective fiscal years. It adds that, at this time, no misstatements have been confirmed in the company’s consolidated earnings or those of the U.S. subsidiary in question, and that while it will incur investigation costs related to the incident for FY3/2027, it expects the impact of those costs to be immaterial. The director in question has resigned, and the President and CEO will return 30% of monthly compensation for three months and the Senior Managing Director 10% of monthly compensation for one month.

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.