Is Sanrio really a Hello Kitty merchandise company?

A company that sells Hello Kitty merchandise. That is an easy shorthand for Sanrio.

Merchandise is still an important business. But when the FY3/2026 numbers are read in sequence, the way Sanrio owns IP, earns money and plans its next growth stage looks quite different.

The margin is unusually high for the image of a merchandise seller

Start with the income statement and the business model immediately feels different.

Sanrio does not only design and sell its own products. Other companies use Sanrio characters in apparel, food, toys and many other categories, creating revenue without Sanrio needing to manufacture every item itself.

Hello Kitty is no longer the majority of the character mix

Hello Kitty is still Sanrio’s most globally recognizable character. Yet the character mix behind merchandising and licensing gross profit has changed sharply over the last decade.

FY3/2016

Hello Kitty60.6%Other characters39.4%

FY3/2026

Hello Kitty37.3%Other characters62.7%

The more useful reading is not that Hello Kitty became weak. It is that characters such as Cinnamoroll, Pompompurin and Kuromi can now generate business at the same time.

In the fan ranking, Hello Kitty finished fifth

The breadth of that portfolio is also visible outside the financial statements.

One of the world’s best-known characters can place fifth while the ranking itself attracts more than 70 million votes. Sanrio’s asset is not only one superstar; it is the ability for fans to keep finding different characters to care about.

Overseas growth also reflects the licensing model

A broad character portfolio that can be licensed into local categories scales differently from a retail chain that must open every store itself.

Sanrio can enter more categories and markets through local partners and brands without having to build every product and distribution system itself.

Next, Sanrio wants to do more than license its characters to others

Up to this point, the company can be understood as a portfolio of characters scaled through licensing. Its next investments go one step further.

THE VIEW AFTER THE NUMBERS

What the numbers suggest

When the numbers are connected, Sanrio is more than a company that sells Hello Kitty merchandise.

Its operating margin reached 40.1%. Royalty sales grew to ¥96.4 billion, and characters other than Hello Kitty accounted for 62.7% of merchandising and licensing gross profit in Japan and overseas. A decade earlier, Hello Kitty alone represented 60.6%.

The deeper advantage is therefore not dependence on one superstar. It is a character-IP portfolio that can keep producing new favorites and can be licensed through partners around the world. Hello Kitty finishing fifth in the 2026 fan ranking is an unusually clear symbol of that shift.

Now Sanrio is moving beyond licensing alone: it plans about 10 self-published games through March 2029 and has in-house animation on its roadmap. After reading the financials, Sanrio’s own phrase “Global IP Platform Provider” looks less like a slogan and more like a description of how the business is being rebuilt.