Retail profit will be squeezed even if revenue remains flat, following the pullback in demand to replace Windows 10 PCs.

FY2027-Q1 revenue was ¥2,031 million, up just 0.3% year on year, while operating profit was ¥76 million, down 21.8%, ordinary profit was ¥79 million, down 20.5%, and net income was ¥53 million, down 21.3%. Despite revenue remaining almost flat, profit declined sharply, so the next results will need to identify whether sales volume, selling prices, gross margin or SG&A was responsible for the decline in profit.

Retail revenue was ¥2,025.036 million, up 0.3% year on year, but segment profit fell ¥21.400 million to ¥70.453 million from ¥91.853 million a year earlier. This represents an approximately 23.3% decline in profit. PC revenue was ¥1,016.097 million, down 2.8% year on year, reflecting the end of the replacement demand generated in the previous fiscal year by the end of Windows 10 support. Meanwhile, internet mail-order sales were ¥967.443 million, up 5.4%, showing a widening gap within the retail business based on product and channel mix.

For FY2026, retail revenue was ¥8,991 million, up 6.5% year on year, and segment profit was ¥428 million, up 62.4%. The decline in retail profit in FY2027-Q1 is therefore not simply a slowdown in growth, but the first comparison point indicating profitability after the prior year's special-demand effect had faded. The company also cited higher product prices against a backdrop of semiconductor shortages and the situation in the Middle East, as well as consumers holding back on purchases, but the amounts of these impacts have not been disclosed. Next time, we will check PC unit sales and average selling prices, the mix of gaming PCs, the shift to online sales and whether discounts were offered, and assess whether the operating margin is approaching the year-earlier level.