Sanrio Shares Plunge as Q1 Profit Miss Overshadows Strong Sales

Shares of Sanrio Co. (TYO: 8136) plunged on Wednesday after the Japanese entertainment company reported first-quarter operating profit below market expectations, overshadowing strong sales growth driven by the continued popularity of Hello Kitty and other characters.

Sanrio’s operating profit rose 11.1% year-on-year to 22.44 billion yen for the three months ended June. However, the figure fell short of the Bloomberg consensus estimate of 23.4 billion yen, raising investor concerns over slowing profit growth and rising expenses.

The disappointing earnings sent Sanrio shares down as much as 20% to 1,163 yen in Tokyo trading. The stock was last down 18.5% at 1,185.5 yen as of 04:28 GMT.

Despite the profit miss, Sanrio delivered robust revenue growth. Net sales increased 20.7% to 52.04 billion yen, while profit attributable to owners of the parent climbed 9.3% from a year earlier.

The company continued to benefit from strong global demand for its character portfolio, particularly Hello Kitty. Pompompurin also took the top spot in Sanrio’s 2026 character ranking. Sanrio’s global social media following has surpassed 100 million, while membership in its Sanrio+ service reached approximately 3.48 million.

Regional results were more mixed. In North America, sales increased 6%, but operating profit dropped 19.9% due to higher marketing costs. Across Asia, sales advanced 19.8%, while operating profit declined 4.9% as selling, general and administrative expenses increased.

Sanrio kept its full-year earnings forecast unchanged, projecting net sales of 229.8 billion yen and operating profit of 89.5 billion yen.

While Sanrio’s strong character business continues to support revenue expansion, the first-quarter earnings miss and weaker regional profitability have put increased attention on whether the company can control costs and meet its full-year profit target.