FY2026 operating profit is growing faster than revenue, making profit retention in the second half the key to meeting the full-year forecast

Revenue in the first half of FY2026, the fiscal year ending September 2026, was ¥11,466 million, up 6.8% year on year, while operating profit was ¥1,131 million, up 53.8%. Compared with revenue of ¥10,737 million and operating profit of ¥735 million in the same period of the previous year, the ¥729 million increase in revenue was accompanied by a ¥396 million increase in operating profit, indicating that margin improvement contributed more than the expansion in revenue scale. Ordinary profit was ¥1,088 million and interim profit attributable to owners of the parent was ¥647 million, up 56.9% and 40.9%, respectively, year on year.

For the nine months, revenue reached ¥17,352 million, operating profit ¥1,613 million, ordinary profit ¥1,544 million and profit attributable to owners of the parent ¥926 million. The full-year forecasts are revenue of ¥23,000 million, operating profit of ¥1,800 million, ordinary profit of ¥1,730 million and profit attributable to owners of the parent of ¥1,050 million. This represents progress rates of approximately 89.6% for operating profit, 89.2% for ordinary profit and 88.2% for net profit. With profit progress well ahead of revenue progress of approximately 75.4%, meeting the full-year forecasts would require only an additional ¥187 million in operating profit, ¥186 million in ordinary profit and ¥124 million in net profit in the second half.

However, the lead in profit growth will not necessarily continue automatically in the second half. The first-half gross profit margin improved by 3.8 percentage points year on year to 34.3%, as the proportion of NB products with relatively high margins increased and the product mix shifted toward higher-value-added products. At the same time, the company explained that in the nine months, increases in selling expenses and logistics costs were absorbed by improved gross profit. Even if sales volumes stagnate in the second half, it will therefore be important to determine whether higher unit prices and an improved product mix alone can absorb rising costs.

At the next full-year results announcement, the focus should be not only on whether operating profit reached ¥1,800 million, but also on which sales channels and product categories generated the ¥5,647.5 million of remaining revenue and ¥187 million of remaining operating profit required from the third quarter onward. As of the third-quarter results, there had been no revision to the full-year forecasts, which remained at ¥23,000 million for revenue and ¥1,800 million for operating profit. If the company meets its forecasts while maintaining its operating margin, gross profit margin and rate of increase in SG&A expenses, it will be easier to assess the sustainability of the product-mix transformation rather than view the result as a temporary upside.