Revenue growth was modest, while full-year operating profit progress is significantly behind plan.

Revenue for April through June 2026 was ¥5,808.058 million, up 1.2% from ¥5,738.468 million in the same period last year. Operating profit, however, fell 50.8% to ¥143.270 million from ¥291.050 million. The operating margin declined by approximately 2.6 percentage points, from around 5.1% to around 2.5%. The key change in these results was the substantial decline in profit despite revenue remaining at a similar level.

The full-year forecasts are revenue of ¥24,139 million and operating profit of ¥1,660 million, putting Q1 progress at approximately 24.1% and 8.6%, respectively. Revenue was close to a simple one-quarter run rate, whereas operating profit was substantially behind plan. As the company has not provided a separate H1 forecast, revenue of ¥12,069.5 million and operating profit of ¥830 million, calculated by mechanically halving the full-year forecasts, are reference benchmarks for measuring progress rather than company guidance. Against these benchmarks, Q2 alone would need to generate approximately ¥6,261.5 million in revenue and ¥686.7 million in operating profit following the Q1 results.

The company cited higher raw material prices and increased labor requirements associated with launching new products as factors behind the decline in operating profit. However, it has not disclosed the amount of profit decline attributable to higher raw material prices, the amount attributable to new-product launch work, or the offset from price pass-through and productivity improvements. It is therefore not yet possible to determine on a monetary basis whether Q1 operating profit of ¥143 million was affected by temporary launch-related costs or whether higher raw material costs remain an ongoing issue.

At the next results announcement, it will be necessary to check not only whether H1 operating profit recovers to around ¥830 million, but also whether the operating margin has improved from 2.5%. Even if revenue tracks the full-year forecast of ¥24,139 million, the company will need to generate ¥1,517 million in operating profit over the remainder of the year to reach the ¥1,660 million forecast. It will therefore be important to determine whether the burden from raw material prices and new-product launch work has eased from Q2 onward. It will also be necessary to check whether the full-year forecasts remain unchanged or whether the ¥1,660 million operating profit forecast is revised.