Q1 was broadly in line with the full-year plan, but FY2027 calls for lower operating profit despite higher revenue

FY2027-Q1 net sales were ¥1,849 million, up 2.2% year on year; operating profit was ¥303 million, up 1.4%; ordinary profit was ¥344 million, up 2.1%; and quarterly net profit was ¥262 million, up 7.8%. The full-year forecasts are net sales of ¥7,600 million, operating profit of ¥1,300 million, ordinary profit of ¥1,430 million and net profit of ¥997 million. Q1 progress was approximately 24.3%, 23.3%, 24.1% and 26.3%, respectively.

Progress in net sales and operating profit was not materially divergent, although operating profit progress was approximately 1.0 percentage point below net sales progress. The Q1 net sales operating margin was approximately 16.4%, virtually unchanged from approximately 16.5% in the same period of the prior year. At the next results announcement, we will assess not only whether Q1 revenue growth continues through the second half, but also how much higher unit prices from price increases are absorbing the increase in personnel expenses, together with the cumulative H1 margin.

FY2026 actuals were net sales of ¥7,480 million, operating profit of ¥1,308 million, ordinary profit of ¥1,419 million and net profit of ¥1,143 million. Compared with these figures, the FY2027 forecast calls for net sales growth of 1.6% and ordinary profit growth of 0.7%, but a 0.6% decline in operating profit and a 12.8% decline in net profit. FY2026 included a ¥214.1 million gain on the sale of investment securities, while FY2027-Q1 included a ¥27.9 million gain on the sale of fixed assets. It will therefore be important to see whether H1 disclosures distinguish progress in core operating profit from extraordinary gains and losses. The scheduled earnings announcement date is 30 October, and the status of any earnings forecast revision will also be assessed.