Testing the full-year forecast assumption of lower revenue and higher earnings in H1

Revenue for April to June 2026 was ¥2,477 million and operating profit was ¥328 million, down 12.3% and 4.6%, respectively, from the same period a year earlier. Meanwhile, the full-year forecasts remain unchanged at ¥9,589 million in revenue and ¥1,027 million in operating profit. Q1 progress was 25.8% for revenue and 32.0% for operating profit, with operating profit progress 6.2 percentage points ahead of revenue progress. However, these are Q1 standalone progress rates and do not reflect the company’s plan adjusted for seasonality.

The company cited the absence of a large project recorded in the interior construction business in the previous fiscal year, higher raw material prices in the textile business, weak shipments of outdoor-related products and the postponement of some orders as factors behind the revenue decline. In H1, it will be necessary to determine whether these represent temporary project-timing issues that have been carried into Q2 or whether they will persist through the full year as weaker orders or subdued demand. In particular, Q1 revenue in the interior construction business was ¥108 million, down 75.3% year on year, substantially exceeding the decline in consolidated revenue.

Using 50% of the full-year forecast as a simple H1 benchmark, H1 revenue would be ¥4,794.5 million and H1 operating profit would be ¥513.5 million. After deducting Q1 results, standalone Q2 revenue of approximately ¥2,318 million and operating profit of approximately ¥186 million would be required. These amounts are not company guidance for H1, but calculated figures based solely on an even allocation of the full-year forecast. At the next earnings announcement, it will be important to see whether the company can disclose the previous year’s H1 results, seasonality and the status of carried-over orders together.

Compared with FY2026 actual results, the FY2027 full-year revenue forecast is planned to decline 7.4%, from ¥10,349 million to ¥9,589 million, while operating profit is planned to increase 3.5%, from ¥992 million to ¥1,027 million. As the plan calls for maintaining profit despite a smaller revenue base, it will be necessary to confirm in H1 not only whether operating profit progress exceeds revenue progress, but also whether the real estate utilization business and other businesses are offsetting weakness in the textile and interior construction businesses.