Japanese entertainment giant Toho Co. reported a 21% drop in first-quarter operating profit as weaker film performance overshadowed growth in its expanding animation business.
Operating profit fell to ¥19.3 billion ($133 million) for the three months ended May, down from ¥24.6 billion a year earlier. Revenue declined 1.3% to ¥84.9 billion, according to results released Tuesday.
The Tokyo-based studio behind Godzilla and distributor of anime hits like “Jujutsu Kaisen” faced tough comparisons after last year’s exceptional performance from blockbusters including “Haikyu!! The Dumpster Battle” and streaming revenue from the Oscar-winning “Godzilla Minus One.”
Toho’s film division saw operating profit tumble 30% to ¥9.0 billion as box office receipts from domestic distribution dropped 24% to ¥10.6 billion. The company’s latest Detective Conan film became the third consecutive entry in the franchise to surpass ¥10 billion at the domestic box office, while “Doraemon” and other titles also performed well.
The IP and animation segment partially cushioned the decline, with revenue climbing 11% to ¥19.0 billion. The unit benefited from strong international streaming demand for Toho Animation properties and increased merchandise licensing from popular franchises. However, operating profit in the division fell 13% to ¥6.3 billion.
Cinema operations proved resilient, with the company’s theater chain posting a 4% increase in revenue to ¥22.1 billion despite a 2% decline in attendance to 11.0 million visitors during the quarter.
Toho’s real estate business provided stability, generating ¥20.1 billion in revenue with rental properties maintaining a 0.2% vacancy rate.
The company raised its full-year net profit forecast to ¥43.5 billion from ¥37.5 billion, citing ¥8.9 billion in gains from selling two policy investment holdings. Other annual targets remained unchanged, with revenue projected at ¥300 billion and operating profit at ¥57 billion.
The results come as Toho pursues an ambitious ¥120 billion investment plan through 2028 to expand globally, including ¥15 billion dedicated to the Godzilla franchise and plans to double its animation workforce by 2032.
