Full-year operating profit forecast sharply cut from ¥230 million to ¥80 million; H1 will clarify the extent of the downside

Q1 of the fiscal year ending February 2027 covered 1 March to 31 May 2026, with revenue of ¥2,880 million, operating profit of ¥139 million, ordinary profit of ¥154 million and net profit attributable to owners of the parent of ¥92 million. Year on year, revenue rose only 2.7%, while operating profit increased 645.3%, ordinary profit 289.5% and net profit 257.0%. As of Q1, the full-year forecasts were revenue of ¥9,350 million, operating profit of ¥230 million, ordinary profit of ¥250 million and net profit of ¥200 million, and the company had not revised its forecasts.

Subsequently, on 1 October, the full-year operating profit forecast was cut from ¥230 million to ¥80 million, a reduction of ¥150 million, and the net profit forecast was cut from ¥200 million to ¥80 million, a reduction of ¥120 million. The revenue forecast was maintained at ¥9,350 million, so the main change for operating profit was deterioration in the margin or cost assumptions rather than a downward revision to the revenue scale. The revised EPS forecast is ¥23.58, down ¥35.37 from the previous ¥58.95.

Q1 operating profit of ¥139 million exceeds the revised full-year operating profit forecast of ¥80 million by ¥59 million. On a simple calculation, this implies an operating loss of ¥59 million over the remaining three quarters after Q1, and does not assume that Q1 profit will continue at the same run rate. In practice, quarterly seasonality and intersegment eliminations mean that the difference cannot be treated outright as the expected second-half loss, but H1 will need to distinguish between a sharp decline in Q2 profit and a substantial increase in expenses expected in H2.

The consolidated Q1 operating margin was approximately 4.83%, calculated as ¥139 million divided by ¥2,880 million, compared with approximately 0.86% on the revised full-year forecast basis, calculated as ¥80 million divided by ¥9,350 million. The two figures compare actual results with a full-year forecast and are not a simple period-to-period comparison, but the full-year forecast is unusually well below Q1 actual results. In FY2027-H1, it will be important to determine whether cumulative operating profit, quarterly gross profit and SG&A expenses, and the specific assumptions supporting the revised full-year forecast can be confirmed.