FY2027 Q1: assessing the early momentum behind the higher-revenue, higher-profit guidance and the profit margin

FY2026 consolidated revenue was ¥22,506.792 million, up 9.8% year on year, while operating profit was ¥3,153.406 million, up 18.9%. The operating margin was approximately 14.0%, about 1.1 percentage points higher than the previous year's approximately 12.9%. The company's FY2027 full-year forecasts are revenue of ¥25,001.585 million and operating profit of ¥3,800.098 million, representing year-on-year growth of 11.1% and 20.5%, respectively, and implying a planned operating margin of approximately 15.2%. The next Q1 will be the first opportunity to assess whether this margin improvement is progressing in line with the assumptions underlying the full-year plan.

For year-on-year comparison, FY2026 Q1 revenue was ¥4,810.000 million and operating profit was ¥446.000 million. Compared with FY2025 Q1 revenue of ¥4,136.000 million and operating profit of ¥230.000 million, revenue increased approximately 16.3% and operating profit approximately 93.9%, while the operating margin improved from approximately 5.6% to approximately 9.3%. Accordingly, FY2027 Q1 should be judged not merely on whether the company remains profitable, but on the extent to which revenue exceeds ¥4,810.000 million and operating profit exceeds ¥446.000 million, which will provide a benchmark for the recent growth rate.

The earnings materials provided do not include quarterly forecasts for FY2027 or full-year segment profit targets. Nor do they disclose order intake or order backlog, so order backlog cannot be used to supplement revenue as a leading indicator. The company has explained factors behind the FY2026 profit increase, including trends in rental-green contracts, growth in landscaping and display-construction revenue, and increased merchandise sales, but it has not disclosed the contribution from each factor.

Accordingly, in the next Q1 we will review not only actual revenue and operating profit, but also progress toward the full-year forecasts, the operating margin, the number of rental-green contracts or progress against plan, and trends in construction revenue. In particular, if Q1 operating profit is below ¥446.000 million, the increase in second-half profit required to maintain full-year operating profit of ¥3,800.098 million will be greater. Conversely, if the operating margin exceeds FY2026 Q1's 9.3% and improves toward the approximately 15.2% implied by the full-year forecast, this would support the feasibility of the company's plan.