Q1 profit was above expectations, but progress needs to be assessed separately from gains on the sale of investment securities

FY2027-Q1 revenue was ¥1,321.9 million, up 2.5% year on year, while operating profit was ¥78.4 million, up 102.9%. The year-on-year increase in operating profit was ¥39.7 million, and the operating margin rose 2.9 percentage points year on year to 5.9%. Quarterly revenue progress was 23.8% against the full-year forecast of ¥55,500 million, while operating profit progress was 28.0% against the full-year forecast of ¥2,800 million, indicating that profit is ramping up faster than revenue.

Following its first-quarter results, the company revised its FY2027-H1 forecasts to revenue of ¥26,400 million, operating profit of ¥1,300 million, ordinary profit of ¥1,500 million and interim net profit attributable to owners of the parent of ¥900 million. Q1 operating profit of ¥78.4 million has already reached 60.3% of the H1 forecast, suggesting upside based on a simple progress calculation. However, the H1 forecast is a cumulative plan that incorporates seasonality in Q2 and a recovery in the prepared-foods business, and it remains unclear whether Q1’s high profit margin can be sustained.

Ordinary profit was ¥104.3 million and quarterly net profit attributable to owners of the parent was ¥65.5 million, but the company explained that approximately ¥302 million in gains on the sale of investment securities boosted ordinary profit. These gains are not included in operating profit, so improvements at the operating level should be evaluated separately from non-operating one-off factors. At the next results announcement, assuming no further gains on sales, we will assess how much operating profit has accumulated against the H1 forecasts of ¥1,500 million for ordinary profit and ¥900 million for net profit, as well as the factors behind the difference between pretax and after-tax profit.

The full-year forecasts remain unchanged at revenue of ¥55,500 million, operating profit of ¥2,800 million, ordinary profit of ¥2,600 million and net profit of ¥1,600 million. The plan calls for operating profit to decline 8.4% from FY2026 actual operating profit of ¥3,057 million, so Q1’s strong performance has not eliminated the full-year profit decline outlook. At the next results announcement, we will focus on how much of the ¥1,300 million H1 operating profit forecast had been achieved by the end of H1, which segments are expected to generate the ¥1,700 million of operating profit required in the second half, and whether there is room to raise the full-year forecast.