On February 14th, the well-known Japanese lifestyle brand Sanrio released its nine month financial performance report for the third quarter of the fiscal year 2025 (i.e. from April 1st to December 31st, 2024). Lei Bao learned from this that:
In Q2-Q4 of 2024, Sanrio achieved a total sales revenue of 104.79 billion yen (approximately 5.06 billion yuan), an increase of 44.7% compared to the same period last year; The net profit attributable to the shareholders of the parent company for the nine months was 33.79 billion yen (approximately 1.63 billion yuan), an increase of 109.4% year-on-year.
According to calculations, Sanrio’s annual sales for 2024 reached 132.34 billion yen (approximately 6.39 billion yuan), a year-on-year increase of 41.7%; The annual net profit attributable to the shareholders of the parent company was 35.23 billion yen (approximately 1.7 billion yuan), an increase of 101.3% year-on-year, setting a new historical high.
The main reason for the growth in performance is:
On the one hand, Sanrio’s large-scale event related to Hello Kitty’s 50th anniversary has also contributed to the increase in awareness of other characters. Hello Kitty’s total sales have increased by more than twice compared to the same period last year. At the same time, the multi character strategy has been effective, and the total sales of other characters have also increased by about 1.4 times.
On the other hand, the authorization business in Japan has developed smoothly through Hello Kitty and multi role strategy. In the theme parks for product sales in Japan, in addition to the continuous growth of domestic tourist sales, the demand for overseas entry is also increasing; Sanrio’s overseas performance is mainly driven by North America and China, especially in North America where specialty stores and mass market stores are significantly increasing revenue and profits.
In May 2024, Sanrio formulated a three-year mid-term business plan with fiscal year 2027 as the final year. It is expected to achieve a target operating profit of 40 billion yen in fiscal year 2027 and strive to achieve a operating profit of 50 billion yen and a market value of 1 trillion yen in the next 10 years through three measures: “achieving global IP evergreen through re examining marketing strategies”, “building a global growth foundation”, and “expanding IP portfolio and multi-level monetization”.
In 2025, Sanrio will celebrate the 50th anniversary of the popular IP character “Melody” and the 20th anniversary of “Coolomi”. In the financial report, Sanrio stated that with the influence of Hello Kitty’s 50th anniversary event as an opportunity, the positive trend of subsequent character anniversary events will continue.
Looking back at the performance of the past three years, Sanrio had a deficit in operating profit in fiscal year 2021. However, after establishing a new management structure, Sanrio completed corporate culture reform, structural reform, and new sustainable business expansion, and achieved performance recovery through the mid-term management plan from fiscal year 2022 to fiscal year 2024.
Sanrio has proposed a new three-year mid-term management plan centered around the strategy of “investment and expansion”. Its ultimate goal is to have a market value exceeding 1 trillion yen and an operating profit exceeding 50 billion yen.
It is worth noting that Sanrio said in the report that Chinese Mainland is one of the regions with high popularity of Sanrio IP and the most important expected market growth. Sanrio also specially proposed three measures for Chinese Mainland, namely:
1、 Maximize cooperation with Alibaba Fish.
Sanliou signed an authorization agreement with Alibaba Group’s IP trading and innovation platform Aliyu in 2022, and expanding this partnership is an important strategic step. The company’s goal is to increase revenue from authorized business by investing in local marketing and collaborating on animation production using Alibaba Group’s business foundation in China.
2、 Strengthen anti infringement measures and expand local design teams.
In the Chinese Mainland market where infringing goods have become a major problem, Sanrio will strengthen its own legal team and take comprehensive anti infringement measures. At the same time, Sanrio will strengthen the construction of its local design team in China to address the shortage of talent resources for local creators.
3、 Pay attention to the creation of domestically produced IP in China.
Sanrio believes that Chinese IP is becoming more and more popular in Chinese Mainland. Although Sanrio has exported many characters from Japan to China so far, in the future, Sanrio will also face the new challenge of “creating Chinese domestic IP”.
After taking into account these measures, Sanrio has set a goal to increase the profit contribution from the Chinese region from 310 million (6.2 billion yen) to 500 million (10.2 billion yen) within three years.
