Full-year earnings growth plan faces its first test of sustainability in the first half

First-quarter operating revenue was ¥47,451 million and operating profit was ¥1,701 million. The full-year plan calls for operating revenue of ¥180,770 million and operating profit of ¥2,930 million, putting first-quarter progress at 26.3% and 58.0%, respectively. Revenue was slightly above the 25% implied by three months elapsed, while operating profit was significantly ahead of that pace, so it needs to be assessed based on first-half seasonality rather than through a simple annualization.

Deducting first-quarter results from the full-year plan leaves ¥133,319 million of operating revenue and ¥1,229 million of operating profit to be generated over the remaining 3 quarters. Since the first quarter alone consumed 58.0% of the full-year operating profit plan, the key issue is not so much whether profit will build further in the first half, but whether the business is structured to maintain the planned profit level in the second half. The company has not revised its full-year forecast, but has not provided a standalone first-half target or the level required for the remaining period.

In the first half of the fiscal year ending March 2026, the comparison period, revenue was ¥90,993 million, operating profit was ¥1,833 million and net profit was ¥813 million. For FY2027-H1, we want to confirm whether the company can at least exceed these revenue and operating profit levels. First-quarter operating profit has reached ¥1,701 million, so on a simple calculation, adding more than ¥133 million in the second quarter would put first-half operating profit above the year-earlier level. This is only the minimum year-on-year comparison, however, and whether it is accompanied by sustainable gross margin and expense reductions is a separate issue.

The first-quarter earnings presentation did not disclose the progress rate against the full-year forecast, the assumptions underlying the earnings outlook, the amount of risk, or the amount required for the remaining period. Accordingly, at the next earnings release it will be necessary to confirm whether cumulative first-half operating revenue and operating profit exceed the year-earlier first-half levels, as well as the amount required in the second half to maintain full-year operating profit of ¥2,930 million and whether the full-year forecast has been revised.