FY2027-Q1 delivered higher revenue and profit, but profit progress is lagging revenue against the full-year plan

Consolidated revenue in FY2027-Q1 was ¥2,962 million, up 1.1% year on year, while operating profit was ¥682 million, up 1.0%. Ordinary profit was ¥853 million, up 2.5%, and profit attributable to owners of the parent was ¥599 million, up 1.8%, meaning that all major profit measures increased. However, the operating margin was 23.0%, down 0.1 percentage points from 23.1% in the year-earlier period. The gross profit margin rose 1.0 percentage point year on year to 51.1%, but SG&A expenses increased 4.8% to ¥829 million, absorbing part of the improvement in gross margin.

The full-year forecasts are revenue of ¥13,500 million, operating profit of ¥3,530 million, ordinary profit of ¥3,890 million and profit attributable to owners of the parent of ¥2,720 million. First-quarter progress was 21.9%, 19.3%, 21.9% and 22.0%, respectively, indicating weaker progress in operating profit than in revenue and ordinary profit. The first-quarter operating margin was 23.0%, compared with a full-year forecast of 26.1%. Accordingly, in FY2027-H1, the key issue will be not only whether revenue expands, but also how far the cumulative first-half margin rises from the first-quarter level.

Using 50% of the full-year forecast as a simple halfway benchmark, FY2027-H1 would require revenue of ¥6,750 million, operating profit of ¥1,765 million, ordinary profit of ¥1,945 million and net profit of ¥1,360 million. Based on first-quarter results, the second quarter alone would need to generate revenue of ¥3,788 million, operating profit of ¥1,083 million, ordinary profit of ¥1,092 million and net profit of ¥761 million. These are not half-year forecasts provided by the company, but reference figures derived by simply dividing the annual plan in half. They nonetheless provide a basis for assessing the likelihood of meeting the plan at the half-year results.

The company did not prepare a quarterly consolidated cash flow statement for the first quarter, so operating and investing cash flow cannot be verified. At the next results announcement, it will be necessary to examine not only cumulative progress in revenue and operating profit, but also the drivers of changes in cost of sales of ¥1,450 million and SG&A expenses of ¥829 million, whether relocation costs and system management expenses are one-off or recurring, and the cumulative first-half operating margin.