The FY2027 fiscal year ending May recovery plan will first be tested by whether the housing business can exit the red.

For the fiscal year ended May 2026, consolidated net sales were ¥197.740 billion, operating profit was ¥3.842 billion, ordinary profit was ¥3.757 billion, and profit attributable to owners of the parent was ¥1.213 billion. Compared with the previous year's net sales of ¥200.817 billion and operating profit of ¥4.113 billion, net sales decreased by ¥3.077 billion and operating profit by ¥271 million. Although the overall sales scale has not deteriorated materially, the profitability of the core housing business has worsened, continuing to weigh on consolidated earnings.

The company's plan for the fiscal year ending May 2027 calls for net sales of ¥230 billion, operating profit of ¥7.5 billion, ordinary profit of ¥6.7 billion, and profit attributable to owners of the parent of ¥4 billion. Compared with the fiscal year ended May 2026, net sales need to increase by ¥32.260 billion, or 16.3%, while operating profit needs to increase by ¥3.658 billion, or 95.2%. This is a plan to nearly double operating profit, rather than simply narrow the decline in sales, and therefore assumes that the housing business will exit the red and that businesses such as detached-home subdivisions will continue to contribute to earnings.

Quarterly trends show that, in the first quarter of the fiscal year ended May 2026, net sales were ¥29.095 billion and the operating loss was ¥4.435 billion; for the first half, net sales were ¥88.443 billion and the operating loss was ¥1.123 billion; and for the first nine months, net sales were ¥120.824 billion and the operating loss was ¥3.375 billion. The company returned to an operating profit of ¥3.842 billion for the full year, which, on a simple residual calculation, implies operating profit of approximately ¥7.217 billion in the fourth quarter. Seasonality, with housing deliveries concentrated at the end of the fiscal year, needs to be taken into account, but the key benchmark in the next Q1 will be how much the substantial year-earlier loss can be contained as an early indicator of progress toward the full-year plan.

At the next results announcement, it will be necessary to review not only consolidated earnings but also the housing business's operating results, real estate business profit, orders received, and deliveries together. The previous earnings presentation did not show progress rates against the full-year plan or the levels required for the remainder of the period. Accordingly, the disclosure focus for FY2027-Q1 will be whether progress rates for net sales and operating profit, the basis for maintaining the full-year plan, and the timing of the housing business's exit from the red are specified.