[Nikkei QUICK News] Sanrio Company (8136, Sanrio) temporarily hit JPY3,530 on the Tokyo Stock Exchange on August 3, up 16% from the previous day and the highest price in almost seven years since September 2015. The upward revision of the company’s full-year earnings forecast for the fiscal year ending March 31, 2023 (this fiscal year) and the dividend increase announced on August 2 prompted investors to buy the company’s shares. “Kawaii,” meaning cute, which Sanrio has been focusing on for over 60 years is evolving with both newness and nostalgia.
The company has revised its consolidated operating income forecast for the current fiscal year upward significantly to JPY4.7 bn, up 85% over the previous year, from the original forecast of JPY3.0 bn, up 18% YoY. It also exceeds the market forecast. “Things are going well in all directions,” said Ikuo Mitsui, fund manager at Aizawa Securities. The annual dividend for the current fiscal year will be JPY20 per share, an increase of JPY4 per share from the previous forecast, which was unchanged from the previous fiscal year.
Fiber Beams Illuminating Sanrio Puroland
Sanrio is keeping an eye on new trends all the time and incorporating them into its character goods and events. One of the typical examples is the “Enjoy Idol Series,” which makes “Oshikatu,” the act of enthusiastically supporting idols, etc., more enjoyable and convenient.
The company offers a full lineup of products, including Cheki (instant camera) holders to carry favorite Cheki and cases for Uchiwa fans, a standard concert merchandise. At Sanrio Puroland (Tama City, Tokyo) and Harmonyland (Hijimachi, Oita Prefecture), original “name holders” created by combining one’s own favorite parts are becoming increasingly popular. The price increases depending on the number of parts combined, but everyone is enthusiastically making their own special holders with the name of their favorite idol or character.
The variable ticket pricing system introduced at Puroland on April 8 also proved successful. Sanrio Entertainment, which operates the park, posted an operating profit of JPY150 mn in the April-June 2022 period, a significant improvement from a loss of JPY300 mn in the same period a year earlier.
Starting July 15, Puroland has been presenting a new regular show “Nakayoku Connect,” an interactive show that uses fiber beams, a state-of-the-art laser technology. The show enjoys popularity among visitors. Around the same time, the company launched a new attraction, “Charaguri Residence (Character Greeting Residence),” in Puroland.
The highlight is the introduction of a digital numbered ticket system as well as kawaii decorations using neon signs and other materials. This system helps reduce congestion in the facility, an issue that emerged in the wake of COVID-19, while also enhancing customer satisfaction by allowing them to spending time efficiently.
Expanding Fan Base with Showa-era Retro Goods, Featuring Cafe and Candy
Sanrio has recently been expanding its lineup of goods featuring “Showa-retro” styles. In late May, the company launched the “second store” of its popular “Cafe Sanrio” series, offering such items as secret mascots and cream soda-shaped masking tape cases. This time, again, some of the goods sold out immediately.
In July, the company launched a new series, “Sanrio Dagashi Honpo,” themed on a nostalgic candy store. This has led to an expansion of the fan base ranging from adults who were familiar with Sanrio goods in their childhood to children who find retro items new. It is no wonder that this year’s Sanrio Character Award, an annual popularity contest for Sanrio characters, recorded the highest number of votes ever.
Sanrio’s “Lucky Lottery” (a no-lose raffle draw planned and marketed by Sanrio) was launched behind schedule due to the lockdown in Shanghai, China. However, the impact of China seems to be easing as the raffle draws are being launched steadily. Consumption of contents such as character goods is also highly resistant to inflation.
Mr. Mitsui of Aizawa Securities points out that the stock rally on August 3 was accelerated in part by sellers buying back shares, and that a short-term correction can be expected. Yet, he added, “After the replacement of the president, Sanrio is shifting its management style to one that is more in line with the current times, which is starting to pay off. The company’s stock price is likely to continue to be supported by expectations that it will be able to ride a revenue growth trend in addition to the improvement in the current fiscal year.” Sanrio’s honorary chairman, Shintaro Tsuji, founded the company based on his own war experience and the philosophy of “Getting Along Together.” His grandson, President and CEO Tomokuni Tsuji, has taken over the company’s philosophy and is now promoting structural reforms.
Even in the face of the global economic downturn, which is likely to intensify, Sanrio’s “Kawaii” is likely to show its strength in an increasing number of situations.
(Reported on August 3)
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