Members Co hits limit-down as company slashes FY2027 operating profit forecast by 87.5%

Members Co., Ltd. <2130> hit its daily limit down, falling 150 yen from the prior session to 770 yen. After market close on Sep 30, Members announced a revision to its consolidated earnings forecast for the fiscal year ending Mar 2027. Members lowered its revenue guidance to 25 billion yen from 26.87 billion yen (up 2.4% year-on-year) and slashed its operating profit forecast to 200 million yen from 2.5 billion yen (down 87.5% year-on-year). What had been projected as a significant increase in profit across all earnings metrics turned into a sharp decline, triggering a wave of selling.

Members had been strategically withdrawing from low-unit-price projects, but the impact of the Middle East situation - which led some clients to reduce investment - combined with a greater-than-expected decline in demand for specialized talent due to AI, resulted in first-half (Apr-Sep) performance falling significantly short of expectations. In the second half, Members plans to continue investing with a focus on shifting its growth driver from traditional web operations to AX (AI transformation) domains, aiming to improve profitability. The full-year earnings forecast was calculated conservatively, taking into account the time required for business transition.

Members disclosed that for the Sep interim period, revenue came in at 11.8 billion yen, below its prior forecast of 12.59 billion yen, and operating profit swung to a loss of 430 million yen from a projected profit of 320 million yen. As Members transitioned to consolidated financial reporting from the fourth quarter of the fiscal year ended Mar 2026, a direct comparison is not straightforward; however, in the same period of the prior year - when Members reported on a standalone basis - revenue was 11.45 billion yen and operating profit was 263 million yen, meaning results reversed from an effective profit-growth trajectory to an actual loss.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.