FY2027 1Q operating profit reached more than 80% of the full-year plan

Based on the financial summary provided, the latest FY2027 results are for 1Q, ended 30 June 2026. Revenue was ¥6.0615 trillion, operating profit was ¥530.767 billion, and profit attributable to owners of the parent for the quarter was ¥450.915 billion. Compared with FY2026 1Q revenue of ¥5.340268 trillion, operating profit of ¥244.170 billion, and profit attributable to owners of the parent for the quarter of ¥196.670 billion, revenue increased 13.5% year on year, operating profit increased 117.4%, and profit attributable to owners of the parent increased 129.3%. The operating margin also rose from approximately 4.6% in the year-earlier quarter to approximately 8.8%.

The full-year forecasts are revenue of ¥24.15 trillion, operating profit of ¥650 billion, profit attributable to owners of the parent of ¥400 billion, and forecast EPS of ¥102.75. Progress against the full-year forecasts at 1Q was 25.1% for revenue, 81.7% for operating profit, and 112.7% for profit attributable to owners of the parent. For operating profit, only ¥119.233 billion remains to reach the full-year target, whereas ¥18.089 trillion of revenue is still required. Profit progress is therefore substantially ahead of revenue progress. It will be important to determine whether the 1Q margin was driven by one-off factors or can be maintained in H1.

The fact that profit attributable to owners of the parent has already exceeded the full-year forecast is difficult to assess based solely on a recovery in sales volumes. The financial summary provided does not include the breakdown of FY2027 1Q segment revenue and operating profit, tax expense, or other profit and loss items, so the factors behind the decline from operating profit of ¥530.767 billion to net profit of ¥450.915 billion cannot be confirmed. In the H1 results, the focus will be on non-operating income and expenses, the tax burden, and each segment’s contribution to profit growth, to determine whether leaving the full-year net profit forecast unchanged is conservative or reflects one-off factors in 1Q.

At the next results announcement, the minimum progress benchmarks will be revenue of ¥1.2075 trillion, half the full-year forecast, and operating profit of ¥325 billion. Even if operating profit exceeds this level, it will be difficult to assess the sustainability of the margin improvement without disclosure of segment breakdowns, including four-wheelers, two-wheelers, and financial services, as well as unit sales. In particular, if the operating margin falls significantly from approximately 8.8% in 1Q to H1, the focus will be on expense recognition in 2Q and changes in the regional and product mix.