An exceptional start, with operating profit already exceeding the full-year forecast despite slowing sales

In the first quarter, from April to June 2026, revenue was ¥2,877 million and operating profit was ¥145 million. Revenue fell 7.8% year on year and operating profit fell 18.6%, representing an apparent decline in both revenue and profit. At the same time, revenue had reached 28.8% of the ¥10,000 million full-year forecast, while operating profit was equivalent to 111.9% of the ¥130 million forecast. The significant divergence in progress between revenue and profit will be the most important point to monitor in FY2027-H1.

For the six months ending with the second quarter, ¥5,000 million, or half of the full-year revenue forecast, can serve as a simple comparison benchmark. However, the company has not provided a numerical breakdown between the first and second halves that reflects seasonality, so ¥5,000 million is not the company’s plan itself. If H1 revenue falls below ¥5,000 million, it will therefore be necessary to assess by segment whether weak summer-product sales were temporary or whether demand has shifted to spring products and weakness in the sales channels is continuing.

Operating profit exceeded the ¥130 million full-year forecast by ¥15 million in the first quarter alone. This does not immediately mean that the full-year profit forecast is too low. The first-quarter operating margin was approximately 5.1%, below approximately 5.7% in the year-earlier period, and the early contribution from profit appears to reflect the manufacturing segment’s return to profitability and lower related costs following the consolidation of domestic production sites. The focus will be on whether operating profit can remain at ¥130 million in H1 and whether that profit depends on a temporary improvement in manufacturing.

The company has left unchanged its full-year forecasts of ¥10,000 million in revenue, ¥130 million in operating profit, ¥100 million in ordinary profit and ¥90 million in profit attributable to owners of the parent. At the next earnings announcement, it will be important to explain not only how much revenue accumulated in H1, but also why the current forecasts have not been revised and what assumptions have been made for foreign exchange, product costs, personnel expenses and logistics costs. Based on the latest publicly available information, the next earnings announcement is scheduled for 13 November 2026, and maintaining or revising the forecasts will influence the market’s initial reaction.