FY2026 full-year earnings are ahead of plan, but the sustainability of earnings growth is the focus

For the nine months ended May 2026, revenue was ¥11,651 million, operating profit was ¥790 million, ordinary profit was ¥1,102 million and net income attributable to owners of the parent was ¥677 million. While revenue increased just 0.9% year on year, operating profit rose 207.2%, ordinary profit rose 87.2% and net profit rose 113.9%. Revenue of ¥11,651 million represents approximately 74.7% of the full-year forecast of ¥15,600 million, broadly in line with the plan after three quarters.

Operating profit, meanwhile, had already reached 100% of the full-year forecast of ¥790 million by the nine-month period. On a simple calculation, the fourth quarter would need to generate revenue of ¥3,949 million, ordinary profit of ¥48 million and net profit of ¥53 million to meet the full-year forecast. Standalone third-quarter revenue was ¥4,019 million, so revenue would only need to remain at roughly the latest quarterly level, while the forecast assumes no additional operating profit in the fourth quarter. At the next earnings announcement, it will be necessary to determine whether the fourth quarter actually produced a loss or low profit, or whether profit exceeded the full-year forecast.

The improvement in profitability has been substantial. The nine-month operating margin was approximately 6.8%, up about 4.6 percentage points from approximately 2.2% in the same period of the previous year. The company cites higher gross profit, lower selling, general and administrative expenses, transport costs coming in below plan, price pass-through, a review of rental operations and the extension of the useful life of plastic pallets as factors. However, the change in useful life alone increased nine-month operating profit and other items by ¥454.972 million, and it remains unclear whether more than half of the earnings growth reflects recurring revenue growth. For the full year, it will be necessary to examine operating profit excluding the impact of the change in accounting estimates, the sustainability of cost reductions and the effect of weaker sales on the logistics business's gross margin.