Operating profit is lagging behind the pace of sales growth

First-quarter revenue for the fiscal year ending February 2027 was ¥93,723 million, up 2.1% from ¥91,791 million in the year-earlier quarter. Operating profit, however, was ¥909 million, below ¥970 million a year earlier. Ordinary profit was ¥798 million, down 10.1% year on year, while net income for the quarter was ¥475 million, down 35.5%. The operating margin was approximately 0.97%, down approximately 0.09 percentage points from approximately 1.06% in the year-earlier quarter.

First-quarter progress toward the full-year forecast was approximately 23.9% for revenue, calculated as ¥93,723 million ÷ ¥392,000 million, and approximately 10.4% for operating profit, calculated as ¥909 million ÷ ¥8,700 million. Revenue was close to the simple quarterly benchmark of 25%, whereas operating profit was well behind it, making the extent of the recovery in cumulative first-half operating profit important. On a simple calculation, ¥196,000 million in revenue and ¥4,350 million in operating profit, equivalent to 50% of the full-year forecasts, provide one benchmark for FY2027-H1.

The supplementary first-quarter materials do not disclose progress toward the full-year forecasts, the levels required for the remaining period, or the company's assessment of performance against plan. At the next results announcement, we will want to compare cumulative 2Q revenue, operating profit, ordinary profit and net income with the full-year forecasts, and confirm whether operating profit returns to year-on-year growth and whether the full-year plan of ¥392,000 million in revenue and ¥8,700 million in operating profit is maintained.