Overseas operations drove sales growth, while declining domestic revenue and higher SG&A expenses weighed on operating profit

Consolidated sales in FY2027-Q1 were ¥120,463 million, up 3.3% year on year, while operating profit was ¥10,088 million, down 7.5%, and ordinary profit was ¥15,647 million, down 9.0%. Higher sales did not translate into higher operating profit. Compared with year-earlier sales of ¥116,586 million and operating profit of ¥10,906 million, sales increased by ¥3,877 million while operating profit declined by ¥818 million.

By segment, domestic sales were ¥55,368 million, down 7.2% year on year, and segment profit fell sharply to ¥5,658 million from ¥8,784 million a year earlier. The Americas reported sales of ¥25,751 million, up 18.7%, and profit of ¥6,922 million. Asia and Oceania reported sales of ¥33,687 million, up 14.4%, and profit of ¥3,137 million. Combined overseas profit therefore increased to ¥9,877 million from ¥7,640 million a year earlier. Europe reported sales of ¥3,656 million, up 14.2%, but recorded a loss of ¥182 million.

In terms of volumes, consolidated overseas dairy product sales volumes were 13,547 thousand bottles per day, or 104.5% of the year-earlier level, while the overseas total was 29,349 thousand bottles per day, or 102.2%. By contrast, total standalone dairy product sales volumes were 8,571 thousand bottles per day, or just 91.9% of the year-earlier level. Accordingly, Q1 revenue growth depended on overseas sales and volume expansion rather than a recovery in domestic demand. The continued difficult market environment, with both domestic dairy products and soft drinks below the year-earlier level, needs to be separated out when assessing domestic business profitability.

At the next results announcement, the first points to check will be whether domestic sales escape negative year-on-year growth and whether standalone dairy product volumes recover to around 100% of the year-earlier level. It will also be important to see whether sales and profit in the Americas, Asia and Oceania, and Europe can sustain their Q1 growth, and whether the company discloses underlying sales volume and pricing trends excluding the effects of foreign-exchange translation. As of Q1, the company had not sufficiently disclosed the amounts of higher SG&A expenses by factor, such as promotional spending and personnel costs, the foreign-exchange impact by region, or the H1 progress rate against the full-year forecast. Additional explanation in the FY2027-H1 supplementary materials is therefore awaited.