Sanrio announced operating profit for fiscal year 2026 of 77.9 billion, a 50% increase from the prior year and a result that narrowly surpassed the consensus estimate of 976.4 billion.
For fiscal 2027, the company set an operating profit forecast of 89.5 billion, representing a 15% increase year-over-year and edging above the consensus forecast of 89.0 billion.
Management attributed the outperformance relative to analyst estimates primarily to SG&A expenses coming in lower than expected. That reduction in SG&A occurred despite the company increasing its marketing expenditures, indicating a divergence between promotional spending and other administrative cost lines.
Looking to fiscal 2027 margins, Sanrio projects its operating profit margin will compress by 1.2 percentage points year-over-year to 38.9%. The company said this decline reflects higher SG&A overall, which includes specific costs tied to launching a game business planned for the second half of the fiscal year. Those launch-related expenses are explicit drivers of the margin reduction in the forecast.
On geographic performance, Sanrio gave positive guidance for sales growth in North America and signaled that tariff effects have stabilized, reducing a previously noted source of volatility. Market participants had been modeling a lower operating profit for fiscal 2027 - roughly 83.0 billion - after management's prior guidance at the third-quarter results had suggested double-digit growth. The new guidance thus sits above those market expectations.
What this means
- Sanrio reported a materially higher operating profit for fiscal 2026 and set a 2027 operating profit target that surpasses consensus.
- Cost control in SG&A was a key factor in the current-period beat, even as marketing costs increased.
- Planned investment in a game business in the second half of the fiscal year is expected to raise SG&A and trim the operating margin next year.