Strong Q1 profit growth creates headroom for the first-half plan, but Q2 must confirm its sustainability

In Q1 of the fiscal year ending February 2027, consolidated operating revenue was ¥146,219 million, operating profit was ¥10,151 million, ordinary profit was ¥9,770 million, and net income attributable to owners of the parent was ¥6,655 million. Year on year, operating revenue increased 11.8%, operating profit 42.8%, ordinary profit 51.5%, and net income 52.2%, with profit growth substantially outpacing revenue growth.

The earnings presentation materials report revenue of ¥141,601 million and operating profit of ¥10,151 million. Because the consolidated financial results report uses the line item “operating revenue” while the presentation materials use “revenue,” comparisons for the first half need to use the definitions within the same set of materials. The full-year operating profit forecast is ¥23,000 million, and Q1 actual operating profit represents 44.1% of that amount. However, given the quarterly seasonality of the retail business, it is too early to judge full-year upside based on the Q1 progress rate alone.

The earnings presentation materials set standalone Q2 operating profit at ¥4,798 million. Adding this to Q1 actual operating profit of ¥10,151 million gives first-half operating profit of ¥14,949 million, ¥247 million, or approximately 1.7%, above the previous year's first-half result of ¥14,702 million. Accordingly, whether year-on-year earnings growth can be maintained in the first half will depend on whether the Q2 plan is achieved and whether the special-demand contribution and gross margin improvement seen in Q1 are sustained.

The Q1 consolidated financial results report does not include a quarterly cash flow statement, so there is not yet enough information to assess operating cash flow and investment requirements alongside earnings. In the next first-half results, we will want to confirm whether operating profit exceeds at least ¥14,702 million, the degree to which the ¥4,798 million Q2 plan is achieved, whether the ¥23,000 million full-year forecast is revised, and whether earnings growth is accompanied by cash generation from operating activities.