Bandai Namco Holdings Inc.

On August 7, the Tokyo stock market saw the Nikkei average extend its decline, ending the day down 76.55 yen at 65,606.71. Among gaming and entertainment stocks, Nintendo extended gains after the previous day's first-quarter results showed operating profit surged 150.5 percent year-on-year, a sharp increase that was well received. Bandai Namco also extended gains, recovering above the 5,000 yen level, after reporting record-high first-quarter results and raising its cumulative second-quarter earnings forecast. MegaChips rose for a seventh straight session after swinging to a profit in the first quarter and announcing a share buyback funded by an upward revision in gains from the sale of SiTime shares. Digital Hearts hit its daily limit up with proportional allocation following an announcement of a tender offer by Sandbox, a company wholly owned by Chairman Miyazawa.

Bandai Namco Holdings extended its gains, quickly reclaiming the 5,000 yen level. The company continues to be rewarded after announcing the day before that its first-quarter earnings hit a record high and that it had raised its cumulative second-quarter forecast. Nomura Securities maintained its neutral rating but lifted its target price from 4,500 yen to 5,200 yen.

In Bandai Namco Holdings' fiscal year ending March 2026, the biggest earner was not the game business but the toy and hobby segment. Operating profit for toys and hobbies reached 126.9 billion yen, up 24.2 percent year-on-year, with an operating margin of about 20 percent. Meanwhile, operating profit for the digital business, which includes games, fell nearly 20 percent from the previous year to 56.6 billion yen. The success of a new Gundam series anime and the company's exhibition at the Osaka-Kansai Expo boosted the profile of the intellectual property, driving strong sales of related products such as plastic models. The company's strategy of leveraging its diverse IP across multiple business lines is working as a profit portfolio, with earnings not reliant solely on games underpinning its bottom line.

On August 6, Bandai Namco Holdings hit a year-to-date high on the Tokyo stock market. Record first-quarter results and an upward revision to its September interim earnings were taken as a positive surprise, sending the stock soaring in the afternoon session. Among 99 registered game and entertainment-related stocks, 56 rose, with buying in the lead. Colopl was bought on the back of a sharp profit increase in the third quarter, but struggled to extend gains as profit-taking capped the upside. Sankyo rebounded despite a sharp profit decline in the first quarter, as its plan to increase dividends was well received. The Nikkei Stock Average fell 617 yen to 65,683 yen, snapping its winning streak, but the TOPIX ended in positive territory, with active stock picking driven by earnings announcements.