GEO HOLDINGS CORPORATION (2681): FY2025 Results Summary — Net Sales Up 12.5% and Profit Up 92.6%

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: the Company’s materials label the fiscal year ended March 31, 2026 as “FY2026” and the preceding year as “FY2025”, while this site classifies the most recently completed fiscal year as FY2025; the text, tables and segment data below keep the labels used in the Company’s materials.

GEO HOLDINGS CORPORATION reported consolidated net sales of 481.2 billion yen for the fiscal year ended March 31, 2026, up 12.5% year on year, with operating profit of 14.2 billion yen (up 26.6%), ordinary profit of 15.3 billion yen (up 25.6%) and profit attributable to owners of parent of 8.7 billion yen (up 92.6%). Reuse clothing and accessories grew to 122.3 billion yen (up 19.7% YoY) and brand-new merchandise rose to 124.3 billion yen (up 25.5% YoY), while reuse luxury came in at 57.5 billion yen (down 1.1% YoY) and reuse smartphones and tablets at 48.8 billion yen (up 7.3% YoY). The Company also recorded a foreign exchange gain of 0.7 billion yen and, as an extraordinary gain, a gain on bargain purchase of 1.5 billion yen.

Consolidated Results (Full-Year Actual)

The Company describes overall performance as posting higher revenue and earnings, with sales and profits increasing year on year and both significantly exceeding prior-year levels. Reuse delivered strong results, continuing to be led by clothing and accessories, supported by active store expansion in Japan and overseas and rising consumer preference for reuse goods. Brand-new achieved significant revenue growth, driven by the Nintendo Switch 2 as stable supply ensured strong sales. SG&A expenses increased 9.9% year on year on higher headcount from recruitment, base salary increases and rising costs from new store openings, which the Company describes as remaining largely in line with expectations.

Item (Million yen)	FY2026 Results	FY2025 Results	YoY Increase/Decrease	YoY Increase/Decrease (%)
Net sales	481,249	427,669	53,580	12.5%
Gross profit	189,446	170,671	18,774	11.0%
(Gross profit margin)	39.4%	39.9%	–	– 0.5pt
SG&A expenses	175,207	159,421	15,785	9.9%
Operating profit	14,239	11,250	2,989	26.6%
(Operating profit margin)	3.0%	2.6%	–	0.3pt
Ordinary profit	15,348	12,224	3,123	25.6%
Profit attributable to owners of parent	8,738	4,537	4,200	92.6%

Net Sales by Merchandise

Reuse net sales rose 9.7% to 300,606 million yen. The Company notes that sales of clothing and accessories, the core merchandise category at 2nd STREET stores in Japan and overseas, continue to grow steadily on the expansion of sales channels through new store openings, and that smartphone and tablet sales increased mainly on new store openings and an increase in co-located stores in the GEO mobile business. Gaming-related products including the Nintendo Switch 2 and peripherals performed strongly, while brand-new trading card products and private brand (PB) products also posted steady growth. Luxury sales declined in the first half on the impact of U.S. tariffs, with performance showing signs of recovery as watch market prices rebound.

Merchandise (Million yen)	FY2026 Results	FY2025 Results	YoY Increase / Decrease	YoY Increase / Decrease (%)
Reuse	300,606	273,915	26,690	9.7%
Clothing and accessories	122,310	102,168	20,142	19.7%
Furniture and home appliances	12,975	11,968	1,007	8.4%
Luxury	57,595	58,261	– 665	– 1.1%
Games	34,041	33,048	993	3.0%
Smartphones and tablets	48,830	45,494	3,335	7.3%
Other (reuse)	19,965	17,848	2,116	11.9%
Other (media)	4,887	5,126	– 238	– 4.7%
Brand-new	124,333	99,100	25,232	25.5%
Others	56,310	54,653	1,656	3.0%
Digital contents	20,922	17,163	3,758	21.9%
Rental	25,131	28,647	– 3,516	– 12.3%
Others	10,256	8,841	1,415	16.0%
Total	481,249	427,669	53,580	12.5%

Store Network

The total number of GEO Group stores as of March 31, 2026 was 2,274. 2nd STREET opened 100 new stores worldwide during the year and became the largest brand in the Group by store count, surpassing GEO. Overseas, the Company opened its first stores in Singapore and Hong Kong in the first half of the fiscal year, taking 2nd STREET’s overseas network to 148 stores across the United States (55), Taiwan (50), Malaysia (30), Thailand (9), Singapore (2) and Hong Kong (2). A new store format, GEO DIGITAL BASE, was also launched.

Brand (stores)	As of the end of FY2026	As of the end of FY2025	As of the end of FY2024
2nd STREET (total)	1,079	993	919
2nd STREET (Japan)	931	880	838
2nd STREET (Overseas)	148	113	81
GEO	1,027	1,054	1,084
OKURA	23	24	23
Luck Rack	45	27	18
CAPSULE RAKKYOKU	61	42	22
Other	39	46	43
Total	2,274	2,186	2,109

Full-Year Forecast (Fiscal Year Ending March 31, 2027)

Centered on 2nd STREET, which is actively opening 100 stores in Japan and 38 overseas, the Company aims to increase net sales to 510 billion yen by expanding its reuse product offerings and enhancing procurement efficiency. Wage increases, inflation and higher store opening costs are expected to put pressure on profits, and the Company therefore forecasts higher sales and lower profits for the fiscal year ending March 2027. The forecast store count represents total planned openings excluding closures.

Item (Million yen)	FY2027 Full-year Forecast	(Reference) FY2026 Full-year Result	YoY Increase/decrease	YoY Increase/decrease (%)
Net sales	510,000	481,249	28,750	6.0%
Operating profit	13,000	14,239	– 1,239	– 8.7%
(Operating profit margin)	2.5%	3.0%	–	– 0.5pt
Ordinary profit	12,500	15,348	– 2,848	– 18.6%
Profit attributable to owners of parent	6,000	8,738	– 2,738	– 31.3%
Number of directly managed stores	2,346 stores	2,153 stores	193 stores	–
ROE	5.48%	8.91%	– 3.43pt	–
Net D/E ratio	0.30x	0.33x	– 0.03	–

Shareholder Returns

The Company recognizes that returning profits to shareholders is one of its top management priorities, and its fundamental policy is based on providing stable dividends while securing a stable management base and improving profitability. In the materials the Company states that it forecasts a year-end dividend of 17 yen per share, bringing the annual dividend to 34 yen per share, and the dividend slide shows an interim dividend of 17 yen (target) and a year-end dividend of 17 yen (target) for an annual dividend of 34 yen (target). Going forward, the Company says it will continue to safeguard its financial soundness while working to improve capital efficiency and provide stable and continuous dividends.

Growth Initiatives and Topics

The Company states that Group annual sales are currently less than 500 billion yen, and that it aims to achieve consolidated net sales of 1 trillion yen by FY2036 and to expand the Group to 5,000 stores worldwide, including 1,000 stores overseas. For 2nd STREET in Japan, the 1,000-store target originally planned for FY2029 has been pulled forward by two years to FY2027, with a longer-term aim of 1,500 stores in Japan by FY2036. The Company targets an ROE of 8% or more for the time being, noting that achieving an ROE of 10% may require refraining from aggressive investment; as of March 2026, PBR was 0.69x, ROE 8.91% and PER 7.71x. EC-related net sales grew 9.1% year on year to 31,914 million yen from 29,247 million yen.

The Company also announced a change of trade name to 2nd RETAILING Co., Ltd., scheduled for October 1, 2026, subject to approval of partial amendments to the Articles of Incorporation at the Annual General Meeting of Shareholders scheduled for June 26, 2026. The stated purposes are clarification of the reuse business as the core operation, acceleration of and strategic commitment to global expansion, and marking the milestone of the 40th anniversary and realization of the long-term vision. In addition, the Company issued its first Integrated Report on October 1, 2025.

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.