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Shochiku Slashes Profit Forecast as Cinema Slump Hits Bottom Line

The company expects to swing to a loss due to weak box office sales and investment setbacks
Japan
s 9601.TSE Anime 20 Mid and Small Cap 2000 Entertainment 100
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Shochiku Co., Japan’s century-old film studio and theater operator, cut its full-year profit outlook, signaling trouble in the cinema industry’s post-pandemic recovery.

The Tokyo-based company now projects a net loss of 580 million yen ($3.8 million) for the fiscal year ending February 2025, a stark reversal from its previous forecast of a 3.5 billion yen profit. Shochiku blamed the downturn on sluggish movie ticket sales and increased losses from equity investments.

Revenue is expected to fall 5.5% to 86.7 billion yen, down from earlier estimates of 91.7 billion yen. The company’s cinema division, primarily operated by subsidiary Shochiku Multiplex Theatres, has underperformed initial expectations as the broader movie theater industry struggles to regain its footing.

Adding to Shochiku’s woes is a 3.5 billion yen loss related to non-voting preferred shares in BS Shochiku Tokyu, an equity method affiliate. This setback will be recorded as a non-operating expense, further eroding the bottom line.

The revised forecast underscores the challenges facing Japan’s entertainment sector as it grapples with changing consumer habits and lingering effects of the pandemic on audience behavior.

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