FY2027 plan calls for higher revenue and profit, but can Q1 demonstrate an operating profit recovery?

In FY2026, revenue rose 2.0% year on year to ¥10,506 million, while operating profit fell 4.6% to ¥491 million. Ordinary profit increased 1.0% to ¥566 million, and net income declined 0.1% to ¥390 million. The key feature of the latest results is that revenue growth did not translate into a recovery in operating profit.

The company's FY2027 forecast calls for revenue of ¥10,620 million, operating profit of ¥530 million, ordinary profit of ¥610 million, and net income of ¥410 million. The respective year-on-year changes from the previous year's results are increases of 1.1%, 7.8%, 7.6%, and 5.0%. Although revenue growth is modest, the plan assumes an improvement in the operating margin. The next Q1 will provide an initial test of the plan, particularly whether operating profit exceeds the ¥88 million reported in the same quarter of the previous year, rather than merely whether revenue is maintained.

In FY2026 Q1, revenue was ¥2,493 million, operating profit was ¥88 million, ordinary profit was ¥103 million, and quarterly net income was ¥72 million. Compared with FY2025 Q1, revenue increased 3.2% from ¥2,416 million, while operating profit fell 3.3% from ¥91 million, indicating that the divergence between revenue and operating profit was also present in the latest Q1. If FY2027 Q1 revenue is positive year on year but operating profit remains at or below ¥88 million, concerns about the full-year profit recovery plan will remain.

Viewed simply as the difference between the full-year forecast and Q1 results, the company would need to generate ¥8,127 million in revenue and ¥442 million in operating profit over the remaining 3 quarters after Q1. However, the company does not disclose quarterly earnings forecasts or seasonality, so these differences cannot be treated as quarterly targets. In the next results announcement, it will be necessary to review the year-on-year changes in revenue, operating profit, ordinary profit, and net income, as well as how raw material prices, housing demand, and selling, general and administrative expenses contributed to the profit recovery.