FY2027 first-half forecast significantly upgraded; second-half earnings need to be confirmed to assess full-year achievement

In 1Q of the fiscal year ending March 2027, net sales were ¥3,476 million, up 4.0% year on year, operating income was ¥417 million, up 115.0%, ordinary income was ¥436 million, up 108.5%, and quarterly net income attributable to owners of the parent was ¥324 million, up 99.1%. A simple calculation of progress against the disclosed full-year forecasts gives 28.0% for net sales, 64.2% for operating income, 62.3% for ordinary income and 61.1% for net income, indicating that earnings progress is substantially outpacing sales progress.

The revised first-half forecast figures announced on 4 November are net sales of ¥6,600 million, operating income of ¥620 million, ordinary income of ¥660 million and net income of ¥460 million. The previous forecasts were ¥6,300 million, ¥330 million, ¥370 million and ¥270 million, respectively, representing upward revisions of ¥290 million in operating income, ¥290 million in ordinary income and ¥190 million in net income. After deducting 1Q results, 2Q alone will need to generate net sales of ¥3,124 million, operating income of ¥203 million, ordinary income of ¥224 million and net income of ¥136 million. The next results announcement should therefore assess whether these 2Q-equivalent levels were actually achieved.

Meanwhile, the disclosed full-year FY2027 plan calls for net sales of ¥12,400 million, operating income of ¥650 million, ordinary income of ¥700 million and net income of ¥530 million. The latest news indicates that the full-year ordinary income forecast of ¥700 million was unchanged, but assuming first-half ordinary income of ¥660 million, ordinary income in the second half would be only ¥40 million on a simple residual basis. Similarly, if full-year operating income is ¥650 million against first-half operating income of ¥620 million, second-half operating income would be ¥30 million. Seasonality, the timing of expense recognition and any additional revision to the full-year forecast will therefore be important points to confirm.

The company attributed the upward revision to sales of Bifina products in Asia, domestic inbound demand, flavor capsule sales, new adoption by major manufacturers and lower promotional expenses. However, the 1Q earnings improvement also benefited substantially from the decline in advertising and promotional expenses associated with the launch of the Chōtech series in the previous year and from the absence of the prior period’s evidence-building investment burden. The amounts attributable to each factor have not been disclosed. The next results announcement should explain whether the first-half upward revision reflects stronger demand or merely a shift in the timing of expenses.