The sharp decline in first-quarter profit requires a recovery in H1 while the full-year forecast remains unchanged

Consolidated revenue in FY2027-Q1 was ¥140,400 million, essentially flat, down 0.3% year on year. Operating profit was ¥5,878 million, ordinary profit was ¥6,651 million, and quarterly profit attributable to owners of the parent was ¥4,842 million, down 40.8%, 36.1% and 32.9%, respectively. With revenue largely unchanged, profit declined sharply, indicating that the margin was pressured not simply by insufficient demand but by a combination of pricing, volume and costs.

Revenue in FY2026-Q1 was ¥140,775 million and operating profit was ¥9,924 million, giving an operating margin of approximately 7.1%. By contrast, the FY2027-Q1 operating margin was approximately 4.2%, a decline of about 2.9 percentage points. The earnings briefing explained that, although price pass-through progressed, the company could not absorb the effects of US tariff policy, the weak housing market, higher energy and material prices, and deteriorating market conditions in overseas operations. In FY2027-H1, it will be important to confirm whether price pass-through actually improves margins and whether fixed costs and manufacturing costs have been adjusted in response to lower volumes.

By segment, Japan recorded revenue of ¥55,417 million and segment profit of ¥1,914 million, up 1.3% and 34.9%, respectively, year on year. North America recorded revenue of ¥52,713 million and profit of ¥4,687 million, down 5.5% and 41.5%, respectively. Europe swung to a segment loss of ¥507 million despite a 9.5% increase in revenue to ¥30,266 million, while Asia recorded revenue of ¥2,126 million and a loss of ¥160 million. The increase in profit in Japan was insufficient to offset the deterioration in overseas earnings.

The full-year forecasts are operating profit of ¥81,000 million, ordinary profit of ¥82,500 million and profit attributable to owners of the parent of ¥60,000 million. The company has not changed these forecasts from those announced in May FY2026. FY2027-Q1 operating profit of ¥5,878 million represents approximately 7.3% of the full-year forecast, but profit tends to be concentrated at the end of the fiscal year because of the company's business structure, so the shortfall cannot be judged from this progress rate alone. At the next results announcement, it will be necessary to confirm together at least cumulative H1 operating profit, the operating margin, earnings improvement in North America, Europe and Asia, and whether the full-year forecasts remain unchanged.