Can the Q1 record be repeated in FY2027-H1?

Q1 of the fiscal year ending March 2027 generated revenue of ¥253.3 billion, business segment profit of ¥54.7 billion, operating profit of ¥54.6 billion, profit before tax of ¥56.8 billion and profit attributable to owners of the parent of ¥49.9 billion. Revenue and profit at each level were all Q1 records, and the company raised its full-year forecasts to ¥980.0 billion in revenue, ¥90.0 billion in operating profit, ¥94.5 billion in profit before tax and ¥77.5 billion in profit attributable to owners of the parent.

If the full-year plan is simply allocated over six months, the first-half benchmarks would be ¥490.0 billion in revenue and ¥45.0 billion in operating profit. Operating profit reached ¥54.6 billion in Q1 alone, representing 60.7% progress against the full-year forecast. Accordingly, at the next results announcement, the key issue will be not the profit amount itself but the level of profit assumed for the remaining 3 quarters. Securing revenue of ¥236.7 billion in Q2 alone would bring the company to the simple first-half revenue benchmark.

However, the Q1 profit increase was not driven solely by normal sales and pricing effects. The factors behind the change in business segment profit include a ¥14.1 billion refund of most of the additional US tariffs, as well as ¥8.8 billion from foreign exchange, ¥7.3 billion from selling prices and ¥13.7 billion from changes in sales and other factors. Promotional expenses of ¥2.6 billion, manufacturing costs of ¥2.4 billion and SG&A and other expenses of ¥2.7 billion were negative factors. In the first half, the key points will be whether further refunds arise and what the underlying earnings power is excluding the refunds.

FY2026 operating profit was ¥77.9 billion, so the FY2027 forecast of ¥90.0 billion assumes an approximately 15.6% year-on-year increase. The Q1 operating margin was 21.6%, well above the approximately 9.2% implied by the full-year forecast, making the level at which the first-half operating margin normalizes another focus. At the next results announcement, we will check not only whether the full-year forecast is maintained or revised again, but also whether the company provides a first-half cumulative bridge separating tariff refunds, foreign exchange, pricing actions, promotional expenses and component costs.