FY2027 March operating profitability depends on a recovery from Q2 onward

The first quarter, covering April to June 2026, generated revenue of ¥10,023 million and an operating loss of ¥79 million. Revenue fell by ¥2,405 million, or 19.4%, from ¥12,429 million in the same period of the previous year. The company attributed the decline mainly to weaker domestic demand and the loss of revenue from its China business. Meanwhile, the operating loss narrowed from ¥635 million in the same period of the previous year to ¥79 million, but the company did not reach operating profitability.

The full-year forecasts remain unchanged at ¥61,000 million in revenue and ¥600 million in operating profit. First-quarter revenue progress was 16.4%, calculated as ¥10,023 million ÷ ¥61,000 million, which was ¥5,227 million below the simple quarterly pace of ¥15,250 million, or 25%, without taking seasonality into account. The company has not disclosed a half-year revenue plan or quantitative assumptions regarding seasonality, so it cannot be concluded from the 16.4% figure alone that the plan is off track. At the next results announcement, however, one benchmark will be whether cumulative revenue through Q2 approaches the simple 50% pace of ¥30,500 million.

On the earnings side, first-quarter operating loss was ¥79 million, compared with a full-year forecast of ¥600 million in operating profit. On a simple calculation, the company needs to generate ¥679 million in operating profit over the remaining 3 quarters. It will therefore be necessary to determine whether the company can return to profitability in Q2 alone or whether the plan assumes that profit will be concentrated in the second half. No revision to the earnings forecast had been made as of the first quarter, and the company had not provided a quarterly breakdown of the profit required to achieve the full-year forecast.

At the next results announcement, the focus will be on whether the assumptions underlying the full-year forecast, including the contributions from price revisions and new products, are quantified in addition to cumulative revenue and operating profit through Q2. In particular, if only revenue progress improves without a corresponding increase in operating profit, the gap to the full-year operating profit target of ¥600 million will not narrow. The focus will therefore be on an explanation separating revenue, gross margin and SG&A expenses.