First-quarter revenue and profit increased, but the full-year plan calls for higher revenue and lower profit, putting the sustainability of margins in focus

First-quarter revenue was ¥1,043.143 billion, not ¥1,043.143 billion, and operating profit was ¥151.553 billion, representing year-on-year increases of 14.7% and 8.0%, respectively. Revenue progress toward the full-year forecast of ¥4,302.0 billion was approximately 24.2%, broadly in line with the 25% elapsed-quarter ratio. Operating profit progress, meanwhile, was approximately 27.3%, ahead of revenue. At the next interim earnings release, the key points will be whether the pace of revenue growth is maintained and whether profit progress continues to outpace revenue.

In the first quarter, the company raised its full-year revenue forecast by ¥184.0 billion, from ¥4,118.0 billion to ¥4,302.0 billion, and its operating profit forecast by ¥47.0 billion, from ¥508.0 billion to ¥555.0 billion. However, the revised operating profit forecast is ¥12.323 billion below the actual result of ¥567.323 billion for the fiscal year ended March 2026, representing a 2.2% decline from the previous year. In other words, assumptions for demand and foreign exchange have improved enough to raise the revenue outlook, but the profit plan remains below the previous year's peak.

The first-quarter operating margin was 14.5%, down 0.9 percentage points year on year. Revenue rose 14.7%, while operating profit increased only 8.0%, indicating that costs and business mix continue to weigh on the conversion of higher sales into profit. At the next earnings release, the key points will be whether the cumulative interim operating margin can remain around 14.5%, whether operating profit progress can build further from the 27% range against the full-year forecast of ¥555.0 billion, and whether the full-year forecast is revised again.