VTuber Giant ANYCOLOR: The "Retailer's" Fate Behind High Profits, Inventory Risks, and Growth Forecast Walls

ANYCOLOR (4832.T), known for its VTuber (Virtual YouTuber) business, is confronting its identity as a "retailer" heavily dependent on merchandise sales ("commerce"), which accounts for about 70% of its revenue, and the associated inventory risks. In March 2026, the company revised its sales forecast upward but simultaneously revised its operating profit forecast downward, triggering a stock price decline. The background to this move was the booking of valuation losses on unsold merchandise from past events. According to analysis by a former institutional investor, while the company boasts an astonishing Return on Equity (ROE) exceeding 60%, its growth drivers are based on the simple structure of "the number of VTubers" and "revenue per VTuber." This makes its future growth rate predictable, thereby diminishing the element of "surprise" in the stock market. The company's future strategy, caught in a dilemma between investor demands for further growth investment and the physical limits of growth/inventory risks, is under close watch.

For the third quarter of the fiscal year ending April 2026 (on a standalone basis), ANYCOLOR reported sales of ¥15.69 billion and operating profit of ¥5.84 billion (operating profit margin of 37.2%). However, in its recent earnings forecast revision, while it raised its full-year sales forecast from ¥52.0-54.0 billion to ¥54.73-55.63 billion, it lowered its operating profit forecast from ¥21.0-22.0 billion to ¥19.82-20.36 billion. The cause of this seemingly contradictory move lies in valuation losses on inventory. The company booked a ¥970 million valuation loss in Q3 and anticipates an additional approximately ¥1.5 billion loss in Q4. This is due to VTuber-related merchandise produced several years ago remaining unsold and losing asset value.

Mr. Izumida, who has experience in IPO-related work at an asset management company, points out that ANYCOLOR's business model is "almost entirely a commerce company." The company's revenue is divided into four areas: live streaming, commerce, events, and promotions. Of the Q3 sales of ¥15.69 billion, commerce accounted for ¥10.74 billion (approximately 68%). Contrary to the image of a digital content-centric company, its reality is closer to a retailer handling physical goods. Mr. Izumida analyzes, "If they were earning profits solely from the VTuber IP (intellectual property), there would be no inventory risk. However, since they are ultimately running a business based on goods leveraging that IP or brand, it results in this business model carrying inventory risk." He notes that to enhance competitiveness as a retailer, improving the accuracy of demand forecasting and inventory management is essential.

On the other hand, the company's profitability is extremely high. An operating profit margin of 37% far exceeds that of general retailers. According to Mr. Izumida's estimates, with an expected net profit of approximately ¥14.0 billion and shareholders' equity of about ¥21.9 billion at the end of the previous period, the calculated ROE exceeds 60%. This indicates an astonishing efficiency, nearly doubling shareholders' capital in a year. The source of this high profitability lies in the business model built on the foundation of VTubers as human resources.

The company's growth can largely be explained by the multiplication of two factors: "the number of VTubers" and "annual revenue per VTuber." As of Q3 FY Apr. 2026, the number of VTubers was 172 (an increase of 7 year-on-year). Annual revenue per VTuber more than doubled from ¥110 million in FY Apr. 2022 to ¥252 million in FY Apr. 2025. Professional institutional investors can "calculate in seconds" the company's overall sales growth rate—generally estimated at around 15-20% annually—based on the VTuber growth rate (4-5% per year) and the projected growth in revenue per VTuber. Mr. Izumida warns, "The very situation where the future becomes predictable can be an unexpected pitfall in the stock market." A predictable growth trajectory makes it difficult to generate major surprises (catalysts for stock price increases) for investors.

This predictability also leads to a dilemma regarding the use of capital (capital allocation). ANYCOLOR has indicated a policy to allocate "over ¥30 billion" of an estimated total fund of approximately ¥56.0 billion (comprising cumulative operating cash flow and cash & deposits expected by FY Apr. 2027) to shareholder returns (dividends and share buybacks). Meanwhile, planned investment in capital expenditure and new service development remains limited to around ¥3.0-5.0 billion. While possessing an ultra-high-profit business with ROE over 60%, it is a natural flow for investors to voice opinions like, "They should invest more in the business to accelerate growth."

However, Mr. Izumida points out the difficult position of a venture company here. "Investors want them to grow. But even if you say that, they can only increase the number of VTubers by a certain amount, produce goods, and if inventory increases too much, it leads to valuation losses like this time. They have to increase inventory while controlling it." Cultivating VTubers takes time, and forced overproduction increases inventory risk. The gap between the growth speed expected by investors and the realistic pace of business expansion may be putting pressure on the stock price.

Furthermore, when the growth rate becomes predictable, investors immediately "price in" that future value into the current stock price. Mr. Izumida explains, "If the stock price gets priced in instantly and then plateaus, the only thing to expect is dividends. The only events left that can raise the stock price are dividends and share buybacks, so the appeal of capital gains (price appreciation) itself diminishes." Many investors targeting growth companies seek significant capital gains. Therefore, behavior akin to a "mature company" focused on stable dividends may conversely be viewed as a retreat in growth expectations.

Regarding the future outlook, Mr. Izumida states that the optimal path for ANYCOLOR is to "patiently nurture VTubers and grow the current business." Having established a powerful business model with 60% ROE, solidifying that foundation is the top priority. On the other hand, he points out that to maintain and improve its valuation from the stock market, it also needs a narrative of "discontinuous growth" that exceeds investor expectations. "It might seem strange to people like us whose job is to make forecasts, but there is also a demand to show us things we cannot predict," Mr. Izumida said, analyzing that the company faces two challenges: optimizing the existing business and presenting new growth opportunities.

Note: The downward revision in the operating profit forecast is attributed to anticipated inventory valuation losses of ¥970 million in Q3 and approximately ¥1.5 billion in Q4.

ANYCOLOR faces a gap between expectations as a cutting-edge digital entertainment company and the reality of being a retailer in the real economy, inherently carrying inventory risk. While armed with astonishing profitability, the path to sustaining that growth and balancing it with market valuation is not straightforward. The key to enhancing corporate value going forward will likely be a dual focus: advancing inventory management capabilities and creating new value that surpasses investor imagination.