The pattern of higher revenue but shrinking margins reappeared in FY2027-Q1

FY2027-Q1 revenue was ¥29,792 million, up ¥3,164 million, or 11.9%, from ¥26,628 million in the same quarter of the previous year. Operating profit, however, fell ¥424 million, or 17.9%, to ¥1,944 million from ¥2,368 million. The operating margin declined by approximately 2.4 percentage points, from about 8.9% in the same quarter of the previous year to about 6.5% in the current quarter, showing that higher revenue is not translating directly into higher profit.

The company cited higher sales volumes of automotive rear-view mirrors in Japan, Thailand and the US, as well as the impact of foreign-exchange translation, as factors behind the revenue increase. It specifically identified higher material costs in Japan and a higher tariff burden in the US as factors behind the decline in operating profit. However, it has not disclosed the monetary impact of material costs, tariffs, sales volumes and foreign-exchange translation on operating profit of ¥1,944 million. In FY2026 as a whole, operating profit was ¥9,156 million and the operating margin was 7.9%, meaning that FY2027-Q1's 6.5% was below the previous full-year level.

The FY2027 full-year forecasts remain unchanged at revenue of ¥117,000 million, operating profit of ¥8,700 million, ordinary profit of ¥9,700 million and profit attributable to owners of the parent of ¥5,900 million. Using 50% of the full-year forecast as a simple six-month benchmark, FY2027-H1 revenue of ¥58,500 million and operating profit of ¥4,350 million would provide reference points for progress. At the next results announcement, the key questions will be not only whether revenue growth continues, but also how much of the increases in material costs and tariff expenses have been offset through price pass-through and productivity improvements, and whether the operating margin has improved from 6.5%.