FY2027 full-year plan calls for a 14.3% increase in operating profit; reproducing the prior-year earnings growth in Q1 is the first hurdle

In the first quarter of the fiscal year ended May 2026, revenue was ¥15,538 million, operating profit was ¥387 million, ordinary profit was ¥439 million, and net income attributable to owners of the parent was ¥301 million. In the prior-year quarter, revenue was ¥14,832 million, operating profit was ¥131 million, ordinary profit was ¥192 million, and net income was ¥106 million. Revenue growth was limited to 4.8%, while operating profit improved significantly. The operating margin rose to approximately 2.49% in FY2026-Q1 from approximately 0.88% in the prior-year quarter.

For the full year, revenue for the fiscal year ended May 2026 was ¥67,733 million, operating profit was ¥1,749 million, and the operating margin was approximately 2.58%. For the fiscal year ending May 2027, the company forecasts revenue of ¥70,000 million, operating profit of ¥2,000 million, ordinary profit of ¥2,100 million, and net income of ¥1,650 million. Operating profit is expected to increase 14.3%, versus 3.3% revenue growth. The plan assumes margin improvement rather than expansion in sales volume, implying a full-year operating margin of approximately 2.86%.

For FY2027-Q1, it will be necessary to check not only whether revenue increased year on year, but also whether profit growth exceeded revenue growth. The prior-year quarter's revenue of ¥15,538 million and operating profit of ¥387 million represented 22.2% and 19.4%, respectively, of the FY2027 plan, so they can also be used for a mechanical comparison of progress. However, the company's quarterly results are affected by the timing of deliveries of agricultural materials and seeds. These progress rates should therefore not be used as a direct benchmark for full-year achievement, but assessed together with year-on-year comparisons.

At the next earnings announcement, we would like to confirm operating margin, ordinary profit, and net income progress in addition to revenue and operating profit. Even if operating profit exceeds the prior-year quarter's ¥387 million, consistency with the FY2027 operating profit target of ¥2,000 million would be weaker if only revenue grew and the margin declined. Conversely, if revenue growth is limited but the operating margin exceeds 2.49% and improvement extends to businesses other than agricultural materials, the full-year plan becomes more achievable.