Sanrio Co. boosted its full-year profit forecast by 12% as the Hello Kitty maker continues to capitalize on overseas demand for its kawaii characters, particularly through high-margin licensing deals.
The Tokyo-based company now expects operating profit of ¥67.3 billion ($455 million) for the fiscal year ending March 2026, up from a previous forecast of ¥60 billion ($406 million). Revenue projections increased to ¥168.8 billion ($1.14 billion) from ¥162.2 billion ($1.10 billion).
First-quarter results underscored the momentum, with revenue jumping 49% to ¥43.1 billion ($292 million) and operating profit nearly doubling to ¥20.2 billion ($137 million). The company attributed the gains to robust performance at domestic stores and theme parks, plus strong licensing revenue from international markets.
Sanrio’s U.S. business brought in 27.6 billion yen in sales, up 120 percent, with operating profit reaching an all-time high of 8.9 billion yen, up 213 percent, according to recent reports. The company has benefited from licensing revenue from the U.S. and China as other characters gain in popularity beyond Hello Kitty.
However, Sanrio’s valuation remains stretched at 34 times forward earnings, raising questions about whether the licensing boom can sustain such elevated multiples. The company’s heavy dependence on character popularity also creates inherent volatility risks as consumer preferences shift.
Chief Executive Tomokuni Tsuji, who spearheaded the turnaround since 2020, continues expanding the company’s digital licensing strategy as it diversifies beyond its iconic feline mascot.
