Takara Tomy, a leading toy company known for its innovative projects like moon exploration robots, announced a significant upward revision in its full-year earnings forecast for the fiscal year ending March 2024. On January 26, 2024, the company revealed that its consolidated sales are expected to reach a record 200 billion yen, surpassing the initial projection of 195 billion yen. This marks a 6.7% increase over the previous year’s 187.2 billion yen, achieving a new milestone for the company.
The surge in sales is attributed to a robust performance in the toy and related businesses, particularly during the year-end sales season in Japan and Asia. A notable increase in sales was seen in Kiddy Land, a character toy retailer, which benefited significantly from the influx of inbound tourism. Additionally, Takara Tomy Arts’ gacha machines, popular among adults, contributed to this success.
While sales figures soared, the company also expects a rise in profits. Operating profit projections have been raised from 13.5 billion yen to 17 billion yen, setting another record high. Similarly, ordinary profit forecasts have been adjusted from 13 billion yen to 16.5 billion yen.
Despite these positive trends, Takara Tomy is maintaining its net income forecast at 9 billion yen. This cautious stance is due to the impairment of goodwill from Fat Brain, its US group company. Acquired in October 2020 by TOMY International, Fat Brain’s performance has been affected by the sluggish toy market in North America, a result of rising inflation.
Fat Brain, purchased for approximately 4.337 billion yen ($41 million), was an independent company specializing in the retail, manufacture, and wholesale of toys and games. Its acquisition was a strategic move for Takara Tomy to expand its presence in the U.S. market. However, the current economic conditions in North America have posed challenges, tempering the overall success of the company. Despite these hurdles, Takara Tomy’s record-setting performance highlights its resilience and adaptability in a dynamic global market.
