FY2027-Q1 returned to profitability ahead of the full-year operating profit forecast, but the next focus is confirming that this is repeatable in H1

The first quarter from March to May 2026 generated revenue of ¥2,449 million, up 20.2% year on year, operating profit of ¥76 million, ordinary profit of ¥90 million and quarterly net profit of ¥65 million, a substantial improvement from the year-earlier operating loss of ¥351 million, ordinary loss of ¥360 million and quarterly net loss of ¥360 million. The operating margin also rose from approximately negative 17.3% in the year-earlier quarter to 3.1%. The biggest change in Q1 was not only the increase in revenue but also the ¥428 million improvement in operating profit.

The full-year forecasts remain unchanged at revenue of ¥9,600 million, operating profit of ¥100 million, ordinary profit of ¥75 million and net profit of ¥45 million. Q1 revenue represented approximately 25.5% of the full-year forecast, while operating profit represented 76%, so operating profit is ahead on a simple quarterly progress basis. At the operating profit level, only ¥24 million of profit is required over the remaining 9 months, creating a structure in which the hurdle for meeting the full-year forecast appears low if profitability can be maintained after H1.

However, the company has consistently explained that seasonality causes revenue and profit to be concentrated in Q4, owing to the year-end and New Year shopping season and the demand season for products for new lifestyles. In fact, FY2026 Q4 alone generated revenue of ¥2,451 million but an operating loss of ¥429 million. In the prior year, declining refrigerator and washing machine sales and higher inventory storage fees coincided with the peak demand period, so it is too early to judge a full-year earnings recovery based solely on profitability in FY2027-H1.

In the next earnings report, we will want to see not only cumulative revenue but also standalone Q2 operating profit, operating margin and the ratio of SG&A expenses to revenue. Even if operating profit reaches ¥76 million as it did in Q1, a renewed loss could occur because of seasonal factors in H2 if the breakdown is heavily dependent on the reversal of temporary inventory write-downs or cost controls. If the full-year forecasts are maintained, it would be desirable to disclose revenue, operating profit, the drivers of profitability and the profit required in H2 as of FY2027-H1.