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Introduction & Market Context
Japan Eyewear Holdings Co., Ltd. (5889) reported record-breaking financial results for the first six months of fiscal year 2026 ending January, according to the company’s financial presentation released on September 11, 2025. The luxury eyewear manufacturer, which operates the Kaneko Optical and Four Nines brands, saw its stock close at ¥2,206 on the day of the announcement, down 2.54% amid broader market volatility.
The company, which specializes in high-end eyewear crafted in Japan’s renowned Sabae region, continues to leverage its premium positioning and craftsmanship to drive growth both domestically and internationally, with particular focus on expanding its presence in Asian markets.
Executive Summary
Japan Eyewear Holdings achieved all-time high revenue and profits for the first half of FY2026, with consolidated revenue reaching ¥8,937 million, a 7.7% increase year-over-year. Operating profit rose 4.8% to ¥2,886 million, while net profit grew 4.0% to ¥1,743 million.
The company maintained a robust gross margin of 79.0%, a slight improvement of 0.3 percentage points from the previous year. However, the operating profit margin contracted slightly to 32.3%, down 0.9 percentage points year-over-year, primarily due to increased selling, general, and administrative expenses related to store expansion.
As shown in the following financial summary:
Quarterly Performance Highlights
The second quarter (May-July 2025) showed continued momentum with revenue of ¥4,745 million, up 6.9% compared to the same period last year. Operating profit for the quarter increased 1.3% to ¥1,578 million, with an operating margin of 33.3%.
A key driver of Japan Eyewear’s financial performance has been its ability to consistently increase product pricing. Since 2019, the company has achieved remarkable growth in average unit prices: Kaneko Optical products have seen a 29.5% increase to ¥80,363, while Four Nines products have risen 18.8% to ¥85,659.
The following chart illustrates this impressive pricing power:
The company’s quarterly performance shows a consistent upward trajectory, with both revenue and operating profit reaching new highs:
Segment Analysis
Both of Japan Eyewear’s primary business segments contributed to the overall growth, though with varying performance metrics:
The Kaneko Optical segment, which represents approximately 66% of total revenue, grew 9.5% year-over-year to ¥5,876 million. Segment profit increased 9.0% to ¥2,224 million, maintaining strong profitability.
The Four Nines segment recorded more modest growth, with revenue increasing 4.3% to ¥3,060 million and segment profit essentially flat at ¥945 million (+0.2%). The slower profit growth in this segment was attributed to decreased domestic wholesale sales.
The segment breakdown is illustrated in the following chart:
International expansion continues to be a significant growth driver for Japan Eyewear. Sales to overseas customers, including inbound tourists, increased by 11.2% year-over-year to ¥1.5 billion, now accounting for 32.9% of consolidated sales. Despite some challenges in markets like Hong Kong and Korea, inbound sales to Japan increased by 3.3% to approximately ¥900 million.
Strategic Initiatives & Growth Roadmap
Japan Eyewear Holdings is pursuing a three-pronged growth strategy focused on domestic expansion, international growth, and strategic acquisitions:
1. Domestic Growth: The company opened four new stores (two each for Kaneko Optical and Four Nines) in prime locations during the first half of FY2026, while closing two underperforming locations. Domestic existing store sales showed healthy growth, achieving 104.8% year-over-year for Kaneko Optical and 106.3% for Four Nines.
2. International Expansion: The company opened its second store in Hong Kong and fourth store in China during the period, continuing its focus on building brand awareness in key Asian markets.
3. Inorganic Growth: Japan Eyewear acquired Hands Ltd. during the quarter, supporting its medium to long-term strategy to strengthen the renowned "Sabae" brand globally.
The company’s growth roadmap is illustrated below:
Japan Eyewear is also working to increase brand awareness both domestically and internationally, with new store openings in strategic locations:
Forward-Looking Statements
Japan Eyewear Holdings has outlined ambitious medium-term financial targets, aiming to reach ¥28.0 billion in revenue (CAGR of 10% or more) and ¥10.0 billion in operating profit (CAGR of 13% or more) by FY2030. The company is targeting an operating margin of 36.0% or higher and ROE of 25.0% or more.
Management noted that these forecasts do not include potential organic growth, and the company intends to pursue further expansion through additional M&A opportunities.
The medium-term targets are detailed in the following slide:
For the full fiscal year ending January 2026, Japan Eyewear is maintaining its forecast of ¥19,050 million in revenue and ¥6,200 million in operating profit. At the six-month mark, the company has achieved approximately 47% of its annual targets, indicating a need for accelerated growth in the second half to meet full-year projections.
The company also announced its dividend policy, with an annual dividend of ¥84 per share, as part of its capital allocation strategy to increase shareholder value while maintaining investment in future growth.
Full presentation:
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