Can sales recover toward the full-year forecast of ¥20,500 million during the peak demand season for winter products?

Revenue for the first quarter from April to June 2026 was ¥1,784 million, an increase of ¥190 million, or 11.9%, from ¥1,594 million in the same period of the previous year. However, FY2027 full-year revenue is forecast at ¥20,500 million, meaning that first-quarter results represented only approximately 8.7% of the full-year forecast. It would not be appropriate to conclude that the plan will be missed solely because first-quarter revenue did not reach the simple one-quarter benchmark for the full-year plan, but it is necessary to note that ¥18,716 million will need to be added from the second quarter onward.

The company explained that first-quarter revenue was limited because the quarter fell after the peak demand season, while selling, general and administrative expenses excluding logistics costs were incurred almost evenly in each quarter, resulting in an operating loss. In fact, the first-quarter operating loss was ¥395 million, approximately ¥22 million wider than the roughly ¥373 million loss in the same period of the previous year. The ordinary loss was ¥223 million and the net loss for the quarter was ¥155 million, both narrower than the ordinary loss of approximately ¥293 million and net loss of approximately ¥207 million in the same period of the previous year. Accordingly, in the second quarter it is necessary to assess separately not only the seasonal recovery in sales but also whether the company can eliminate its operating loss.

First-half cumulative revenue of ¥10,250 million is merely a mechanical benchmark equivalent to 50% of the ¥20,500 million full-year forecast and is not a first-half target indicated by the company. As demand for heating equipment and humidifiers is weighted toward the second half, falling below this level would not immediately indicate an anomaly. However, disclosure of second-quarter cumulative revenue, second-quarter standalone year-on-year growth and the extent of improvement in operating income or loss would allow a more specific assessment of the likelihood of achieving the full-year revenue forecast of ¥20,500 million and operating profit forecast of ¥1,300 million.

The company attributed the first-quarter revenue increase to higher sales of European models of oil-fired heating equipment, gas fan heaters, humidifiers, food-waste dryers and after-sales service parts. In the next results release, it will be necessary to check whether these increases continued in the second quarter and whether additional disclosure is provided on revenue and year-on-year growth by category, such as heating equipment and environmental equipment. At present, increases in revenue and sales volumes by product have not been disclosed, so it is not possible to determine whether revenue growth was volume-led or driven by prices and product mix.