Sanrio Company’s ambitious transformation from Hello Kitty merchandiser to global intellectual property platform faces skepticism as management outlined audacious targets during its fiscal 2025 financial briefing.
Chief Executive Tomokuni Tsuji, grandson of the company’s founder, set a goal of achieving ¥5 trillion ($33.3 billion) market capitalization within a decade, requiring at least 10% average annual operating profit growth. The target represents a dramatic escalation from its current market value following a remarkable stock surge.
The company’s strategy centers on capturing 10% market share in North America, where competition from established players like Disney remains fierce. Management acknowledged the challenge, citing that the “10% level is a fairly high target” given estimated market shares of existing companies in the region.
Sanrio’s push beyond its flagship Hello Kitty character reflects lessons learned from painful volatility. The company endured seven consecutive years of declining operating profits through 2021, largely attributed to over-concentration on a single character and European/American markets.
The entertainment resort conversion of Harmonyland in Oita Prefecture represents the company’s most significant capital commitment, though executives remained vague about investment details. Management stated they will explain “what our own investment will be and how we will attract outside investors as soon as we decide.”
Corporate governance changes accompany the strategic shift, with shareholders voting June 26 on transitioning to an Audit and Supervisory Committee structure. The move suggests recognition that ambitious growth plans require enhanced oversight mechanisms.
While Sanrio+ membership reached 2.52 million users, questions persist whether the platform can deliver sustainable revenues beyond anniversary-driven merchandise sales. The company’s historical earnings volatility suggests investors should scrutinize whether this transformation represents genuine structural change or temporary momentum from Hello Kitty’s 50th anniversary celebrations.
