The full-year forecast appears within reach, but earnings are becoming increasingly dependent on the second half

First-quarter revenue for the fiscal year ending March 2027 was ¥12,096 million, down 1.4% year on year. Operating income was ¥883 million, down 20.9%, ordinary income was ¥956 million, down 19.0%, and net income attributable to owners of the parent was ¥599 million, down 34.3%. The operating margin was 7.3%, calculated as ¥883 million divided by ¥12,096 million, approximately 1.8 percentage points below the 9.1% calculated from revenue of ¥12,271 million and operating income of ¥1,117 million in the same period last year. The key point to confirm in the next earnings release is that the decline in margin is greater than the deterioration in sales scale.

The full-year forecasts are revenue of ¥50,000 million, operating income of ¥4,100 million, ordinary income of ¥4,100 million, and net income attributable to owners of the parent of ¥2,800 million. First-quarter progress was 24.2% for revenue, 21.5% for operating income, and 21.4% for net income. Compared with 25% of the accounting period having elapsed, earnings are lagging revenue. To achieve the full-year forecasts, the company must generate an additional ¥37,904 million in revenue, ¥3,217 million in operating income, and ¥2,201 million in net income over the remaining period after the first quarter. For operating income, this assumes a return to growth from the second quarter onward.

Revenue in the cumulative first half of the previous year was ¥24,020 million, operating income was ¥2,056 million, and net income was ¥1,351 million. Accordingly, in the upcoming second-quarter results, it will be necessary to examine not only whether the decline in earnings narrowed from the first quarter, but also whether cumulative operating income exceeds ¥2,056 million and whether the cumulative operating margin improves from the first-quarter level of 7.3%. First-quarter revenue progress was 24.2%, close to the full-year plan, while operating income progress was only 21.5%. Revenue growth alone is therefore insufficient to assess the likelihood of achieving the full-year forecast.

The disclosures currently available provide the full-year forecasts, but no first-half forecasts, regional revenue, orders received, order backlog, sales volumes, or other indicators that would allow the recovery in earnings to be tested from a volume perspective. At the next results announcement, if revenue exceeds the ¥24,020 million recorded in the same period last year but operating income remains below ¥2,056 million, the possibility that cost factors such as pricing, raw materials, and advertising remain a drag should be assessed carefully. Conversely, if operating income exceeds ¥2,056 million and the operating margin returns above 7.3%, this would support a recovery toward the full-year operating income forecast of ¥4,100 million.