The second quarter's standalone profit slowdown makes the recovery in the second half the key determinant of full-year achievement

In the first half of the fiscal year ending November 2026, revenue increased 2.2% year on year to ¥51,210 million, while operating profit rose 7.0% to ¥5,212 million. The full-year forecasts are revenue of ¥92,500 million and operating profit of ¥6,600 million, putting first-half progress at 55.4% for revenue and 79.0% for operating profit. On the surface, profit is ahead of revenue and progress against the plan appears strong.

However, profit was heavily skewed between the individual quarters. First-quarter revenue was ¥30,384 million and operating profit was ¥4,333 million, whereas standalone second-quarter revenue was ¥17,555 million and operating profit was only ¥107 million. The standalone second-quarter operating margin was approximately 0.6%, down sharply from approximately 14.3% in the first quarter. Although the company remained profitable at the operating level in the standalone second quarter, the fact that first-half cumulative operating profit of ¥5,212 million depended heavily on first-quarter profit is an important point to verify in the third quarter.

Against the full-year operating profit forecast of ¥6,600 million, ¥1,388 million remained to be earned at the end of the first half. Assuming this is earned evenly over the third and fourth quarters, the benchmark is approximately ¥694 million per quarter. For revenue, ¥41,290 million remained to reach the full-year forecast, requiring an average of ¥20,645 million in each second-half quarter. These are progress-monitoring benchmarks calculated from the full-year forecast and first-half results, not third-quarter forecasts disclosed by the company.

The second-quarter materials did not disclose standalone third-quarter revenue or operating profit forecasts, or the levels required for the remaining period. Accordingly, the next results will be assessed to determine whether standalone quarterly operating profit has recovered to around ¥694 million and whether revenue has returned to a pace of approximately ¥20,645 million. If standalone profit again remains low, it will become difficult to judge whether the full-year forecast will be achieved solely on the basis of the high first-half profit progress rate.