Will the pattern of earning most of the full-year operating profit in Q1 be repeated in the first half?

Revenue in Q1 of the fiscal year ending February 2027 was ¥7,399 million, up 7.7% year on year, while operating profit was ¥153 million, up 4.5%. The operating margin was approximately 2.08%, down approximately 0.06 percentage points from approximately 2.14% in the same period of the previous year. Thus, although both revenue and operating profit increased, revenue growth did not translate directly into a higher operating margin.

The full-year forecasts are revenue of ¥29,000 million, operating profit of ¥210 million, ordinary profit of ¥250 million and net income attributable to owners of the parent of ¥150 million. As of Q1, revenue progress was only 25.5%, while operating profit progress reached 72.9% and net income progress reached 56.7%. Based solely on operating profit, only ¥57 million is required over the remaining 3 quarters, indicating that the plan is heavily weighted toward profit generation in Q1.

The company cites strong private-label products, improved procurement conditions for JV products and the addition of サンモール's sales as factors behind the revenue increase. At the same time, personnel expenses, rent and land costs associated with store openings, and サンモール-related expenses increased, causing operating profit growth to fall below revenue growth. The Q1 earnings summary contained no revision to the full-year forecasts, and the annual dividend forecast remained unchanged at ¥13, but the company did not disclose first-half numerical targets or the level of profit required over the remaining period.

At the next results announcement, revenue, operating profit, ordinary profit and net income for the cumulative 2 quarters should be compared with the full-year forecasts. In particular, it will be important to determine whether Q1 operating profit of ¥153 million was merely pulled forward and whether gross margin improvement is continuing. Whether the operating margin can recover to 2.14% from the same period of the previous year, and whether net income can increase from ¥85 million toward the full-year plan of ¥150 million, will provide concrete criteria for assessing the sustainability of earnings growth.