Sanrio, the owner of Hello Kitty, reported a revenue of 52.04 billion yen ($326 million) for the quarter ending in June, marking a 20.7% increase year-over-year, while operating profit rose 11.1% to 22.44 billion yen. Despite these positive results, the company's stock price dropped sharply, reflecting a correction after a 55% increase since its delayed earnings release in June.
Morningstar noted that the quarterly results aligned with its expectations and maintained its fiscal 2026 outlook. Sanrio's growth was driven by the popularity of its characters, which contributed to a 43.5% increase in contribution profit in Japan, supported by new product launches and improved store performance.
The company also reported recovery in sales in the Americas, despite ongoing tariff impacts. Looking ahead, Sanrio plans to expand into gaming with a Nintendo Switch game set for release in October and a mobile game in 2027, although Morningstar does not foresee significant profits from this segment in the near term