Testing whether profit front-loading from pull-forward demand continues into H1

The first quarter from April to June 2026 generated revenue of ¥10,496 million, up 19.0% year on year, operating profit of ¥402 million, up 202.1%, and ordinary profit of ¥394 million, up 216.8%. The company attributed the increases in revenue and profit to capturing demand for advance orders ahead of price increases and amid supply concerns, securing products through coordination with suppliers and manufacturers, passing through higher prices, and using its inventory and logistics capabilities.

The full-year forecasts are revenue of ¥40,000 million, operating profit of ¥900 million, ordinary profit of ¥830 million, and net income attributable to owners of the parent of ¥550 million. First-quarter progress against these forecasts was 26.2% for revenue, 44.7% for operating profit and 53.5% for net income. Since net income includes ¥60 million in extraordinary gain from relocation compensation received, H1 should be assessed primarily on operating profit progress to determine underlying earnings power excluding special factors.

If the full-year forecasts are simply allocated 50% to H1 and 50% to H2, the H1 benchmarks are revenue of ¥20,000 million and operating profit of ¥450 million. Operating profit had already reached ¥402 million by the end of Q1, leaving only ¥48 million required from standalone Q2 to meet this assumed benchmark. Revenue, however, would require ¥9,504 million in standalone Q2, making the sustainability of revenue, rather than profit, and the retention of Q1's high margin more important.

H1 of FY2026 generated revenue of ¥17,990 million and operating profit of ¥294 million. Reaching ¥20,000 million in revenue and ¥450 million in operating profit in H1 of FY2027 would therefore represent year-on-year growth of approximately 11.2% and 53.1%, respectively. However, the company has not disclosed the increases in revenue or profit by demand factor, or the breakdown between sales volume and price. At the next results announcement, the focus will be on whether the company can quantitatively explain standalone Q2 revenue and operating profit, the impact of a reversal in advance orders, sales volume after price increases, and progress in passing through higher prices.