SBC Medical Group Executes Strategic Shift with Franchise Expansion and International Growth Amid Revenue Decline

SBC Medical Group Holdings Inc. (NASDAQ: SBC), the Japanese owner and operator of a chain of cosmetic surgery clinics, continued executing its strategic shift during the first six months of 2025, expanding franchise locations and customer visits as part of efforts to establish market leadership. The company's transformation includes discontinuing its staffing business, targeted divestitures to streamline operations, and revising its fee structure, resulting in an expected 16% year-over-year revenue decline to $91 million for the first half of 2025.

Chairman and CEO Yoshiyuki Aikawa stated that the second quarter results reflected strategic shifts aimed at positioning SBC Medical for long-term competitiveness and scalability, with the company operating 259 franchise locations as of June 30, 2025, and recording 6.31 million visits over the last twelve months. Franchise locations increased 16% compared to last year, while repeat customer visits grew 14% and unique customer visits were 10% higher, demonstrating the company's expanding scale in Japan's aesthetic medicine market.

The company is pursuing a dual strategy of market expansion through increased accessibility and differentiation via advanced treatments and competitive pricing, while also expanding internationally into the U.S. and Singapore markets. Despite declining discretionary spending among Japanese consumers, SBC Medical reported a 72% repeat rate among existing customers at its Shonan Beauty clinics, with average revenue per visit increasing 13% year-over-year to $279, underscoring brand strength and customer loyalty.

Key initiatives include integrating the acquisition of MB Career Lounge Co. Ltd., a privately-held provider of management support services for medical institutions, and plans to join JUN CLINIC, a network of medical and aesthetic clinics with high average customer spending. The company ended the second quarter with $153 million in cash and cash equivalents, providing sufficient resources to fund future growth initiatives according to management.

Reflecting management's confidence in the company's valuation, SBC Medical initiated and completed a $5 million share buyback program between May and July 2025, which the company believes positively impacted daily trading volume. Additionally, the company's inclusion in the Russell 3000® Index at the end of June may increase visibility and attract a broader investor base, acknowledging SBC Medical's position in the economy.

While facing near-term growth challenges during its strategic repositioning, SBC Medical's expansion of franchise locations, growing customer base, and increasing repeat visit rates position the company for long-term success in the enduring global demand for aesthetic medicine and cosmetic surgery services.