A sharp upside surprise in the first quarter lifted the full-year plan, but the underlying performance excluding the tariff refund needs to be assessed

Revenue for FY2027-Q1 was ¥74.51 billion and operating profit was ¥12.81 billion, up 19.8% and 243.5%, respectively, from the same quarter a year earlier. The operating margin was 17.2%, up approximately 11.2 percentage points from approximately 6.0% in the same quarter of the previous year. Ordinary profit was ¥13.423 billion, while net income attributable to owners of the parent was ¥9.377 billion, with profit progress far outpacing revenue.

Following these first-quarter results, the company revised its FY2027 full-year forecasts: revenue from ¥295 billion to ¥300 billion, operating profit from ¥26 billion to ¥34 billion, ordinary profit from ¥26 billion to ¥34 billion, and net income from ¥18.5 billion to ¥23.5 billion. Of the ¥8 billion increase in the operating profit forecast, the company attributed approximately ¥5 billion to better-than-expected performance in the watch business and ¥3 billion to the US tariff refund. Against the full-year operating profit forecast of ¥34 billion, ¥12.8 billion was recorded in Q1 alone, representing simple progress of 37.7%.

However, the ¥3 billion US tariff refund consists of a planned ¥2.1 billion contribution in Q1 and ¥900 million in Q2, and needs to be assessed separately from recurring growth in sales volume and gross margin improvement. Mechanically excluding the ¥2.1 billion tariff refund from first-quarter operating profit of ¥12.81 billion produces underlying operating profit of approximately ¥10.7 billion and an operating margin of approximately 14.4%. This is only a simple analytical adjustment and does not indicate the final accounting presentation or any offset against related costs, but the next results should distinguish watch revenue growth, product mix and promotional spending levels excluding the refund effect.

For FY2027-H1, one progress benchmark will be whether first-half operating profit exceeds ¥17 billion, half of the full-year forecast, while the actual contribution of the tariff refund to first-half profit should also be assessed. First-quarter progress was 24.8% for revenue, 37.7% for operating profit, 39.5% for ordinary profit and 39.9% for net income, indicating that profit is leading progress. The focus of the next results will be whether the watch business remains strong in Q2, whether the ¥34 billion full-year forecast can be supported by factors other than the tariff refund, and whether there is scope for another upward revision.