Q1 operating profit is tracking behind revenue against the FY27 full-year growth plan

Revenue in FY27 Q1, covering 1 April to 30 June 2026, was ¥2,351.999 million, while operating profit was ¥43.339 million. Revenue declined 7.0% year on year and operating profit declined 23.0%, while ordinary profit also fell 9.4% to ¥69 million. In contrast, quarterly net income was ¥45 million, down only 0.4% year on year, indicating that the decline was concentrated at the operating level.

The company's FY27 full-year forecasts are revenue of ¥10,200 million, operating profit of ¥310 million, ordinary profit of ¥380 million and net income of ¥260 million. Progress in Q1 was 23.1% for revenue and 14.0% for operating profit. Compared with the simple 25% benchmark for one quarter, revenue was broadly on track, while operating profit was well below it. As of Q1, there was no change to the full-year forecasts or the annual dividend forecast, and the company's H1 plan was not disclosed.

Simply subtracting Q1 results from the full-year forecasts means that the remaining three quarters need to generate revenue of ¥7,848.001 million and operating profit of ¥266.661 million. Assuming even progress, the average per remaining quarter would be approximately ¥2,616 million in revenue and approximately ¥88.9 million in operating profit, although no information on seasonality has been disclosed. H1 results for the same period a year earlier were revenue of ¥4,898 million and operating profit of ¥77 million. The next results will therefore need to be assessed against these levels, as well as for whether standalone Q2 operating profit remains positive.

The company attributed the Q1 revenue decline to a reduction in orders for promotional materials, as more customers discontinued newspaper inserts against a backdrop of unstable product supplies caused by escalating tensions in the Middle East. Persistently high raw material prices and outsourcing costs, investment in human capital, and a temporary increase in outsourcing costs associated with production equipment upgrades also weighed on operating profit, although the amounts attributable to each factor were not disclosed. The company has a single reportable segment, and no segment revenue or profit, regional revenue, order intake or order backlog data are available. The focus of the H1 results will therefore be whether the company can explain the recovery in demand and cost pressures by volume, unit price and expense category.