Q1 operating profit is unusually front-loaded; can the high level be sustained in H1?

Q1, covering April to June 2026, generated revenue of ¥1,632 million, operating profit of ¥271 million, ordinary profit of ¥301 million and net profit attributable to owners of the parent of ¥250 million. Year on year, revenue increased 20.1%, operating profit 376.9%, ordinary profit 417.3% and net profit 436.2%, with all profit items increasing alongside revenue.

Calculated simply against the full-year forecast, progress was 1,632 ÷ 6,299, or 25.9%, for revenue and 271 ÷ 487, or 55.6%, for operating profit. Revenue was close to the 25% share represented by one quarter of the fiscal year, while operating profit had already exceeded half of the full-year plan. The reference figures for an even six-month pace are revenue of ¥3,149.5 million and operating profit of ¥243.5 million, making revenue accumulation more important than profit in the H1 total.

The company attributed the increase in revenue to strong domestic mail-order sales, growth in the “EnduraPro” series in Asia, particularly Thailand, and China, and improved inventory levels in North America. It explained that operating profit benefited from the transfer of production for some products destined for the US from its Chinese plant to its head office plant in Japan, as well as from a refund of ¥107 million in US tariffs borne in the previous fiscal year, which reduced cost of sales. The ¥107 million represents approximately 39.5% of Q1 operating profit of ¥271 million, but is not a company-disclosed contribution to profit adjusted for other sales factors and cost fluctuations.

Accordingly, the Q2 results should be reviewed not only for H1 revenue and operating profit but also for Q2 standalone revenue, operating margin and sales by region. In particular, whether the ¥107 million tariff refund is included in H1, the amount of recurring cost savings from the production transfer, and whether Q1’s operating margin in the 16% range represents a normal level are central to assessing the likelihood of achieving the full-year forecasts of ¥6,299 million in revenue and ¥487 million in operating profit.