On August 12, Sanrio, the company behind Hello Kitty, fell sharply in Tokyo trading. Its shares dropped as much as 18% after the company released earnings, marking their steepest intraday decline in nearly a decade as results failed to exceed market expectations.
At first glance, the reaction may seem surprising. Sanrio’s results were hardly weak. In the first quarter of fiscal 2027, ended in June, revenue rose 20.7% year-on-year (YoY) to JPY 52 billion, while net profit increased 9.3% to JPY 15.5 billion.
The disappointment came from operating profit.
Sanrio reported operating profit of JPY 22.4 billion, up 11.1% YoY but below market expectations of JPY 23.4 billion. More importantly, the company left its full-year outlook unchanged after raising guidance following nearly every earnings release over the previous several quarters.
Investors appeared to read that as a sign that Sanrio’s rapid growth could be starting to moderate.
