Strong first-quarter performance, but focus remains on the likelihood of achieving the full-year forecast for lower operating profit

In the first quarter of the fiscal year ending March 2027, revenue was ¥8,241 million, operating profit was ¥1,383 million, ordinary profit was ¥1,486 million, and net profit attributable to owners of the parent was ¥995 million. These figures represented year-on-year increases of 5.6%, 28.0%, 26.4% and 27.0%, respectively. Profit growth substantially exceeded revenue growth, with the operating margin rising to approximately 16.8% from approximately 13.9% a year earlier, an increase of about 2.9 percentage points.

The full-year forecasts are revenue of ¥31,700 million, operating profit of ¥4,150 million, ordinary profit of ¥4,400 million and net profit of ¥3,100 million. No revisions had been made as of the first quarter. Revenue progress was approximately 26.0% and operating profit progress approximately 33.3%, with earnings progress ahead of revenue progress. However, the company expects full-year operating profit to decline 2.1% from the previous fiscal year's actual result of ¥4,240 million, so the strong first-quarter performance does not by itself indicate an upside to the full-year forecast.

The company cited semiconductor-related products, fine chemical products for commercial use, consumer products, overseas sales and higher repair prices in the services business as factors behind the first-quarter earnings growth. Profit was also lifted by the absence of the TV commercial production costs incurred a year earlier and a decrease in advertising expenses. Accordingly, the next interim results will need to distinguish whether earnings growth from sales volumes and product mix is continuing or whether the main factor was the prior-year reversal in advertising and promotional expenses.

First-quarter results disclosed segment revenue and profit, but not the profit contribution by factor, orders received and order backlog, regional revenue, or quantitative KPIs such as store and customer numbers. At the next results announcement, we will check whether the year-on-year increase in operating profit continues into the second quarter, whether the company's assessment of its ability to achieve the ¥4,150 million full-year forecast changes, and whether advertising expenses or expenses related to the core system increase again.