Toei Animation expects a sharp reversal from its record-breaking performance, forecasting double-digit declines across all key metrics for fiscal 2026. The Japanese animation powerhouse behind One Piece and Dragon Ball projects revenue of ¥88 billion ($571 million), down 12.7% from the prior year, with net profit falling 19.1% to ¥19.1 billion ($124 million).
The conservative outlook follows a stellar fiscal 2025 that delivered 26% profit growth to ¥23.6 billion and revenue climbing 13.7% to ¥100.8 billion. Management attributes the expected decline to reduced earnings from theatrical releases and streaming rights sales that performed exceptionally well in the previous period, plus weaker new gaming software revenues.
However, investors should view these projections with skepticism. Toei has established a pattern of issuing cautious initial forecasts only to revise them upward throughout the year. For fiscal 2025, the company initially predicted declining profits but ultimately delivered record results that far exceeded expectations.
The studio plans strategic investments to expand overseas markets while continuing production of flagship series including One Piece and the PreCure franchise. Recent initiatives include partnerships in artificial intelligence technology to streamline animation production processes, positioning the company for potential efficiency gains that could boost future margins beyond current conservative estimates.
