Can the Q1 decline in revenue and profit be reversed to bring the company back on track for its full-year plan in H1?

Revenue in the first quarter of the fiscal year ending March 2027 was ¥91,464 million, down 5.6% year on year, while operating profit was ¥6,817 million, down 20.4%. Against full-year forecasts of ¥470,000 million for revenue and ¥48,400 million for operating profit, simple progress calculations are 19.5% and 14.1%, respectively. Compared with the 25.0% benchmark that would apply if the year were divided evenly across four quarters, revenue is 5.5 percentage points behind and operating profit is 10.9 points behind.

After Q1, the amounts still required to meet the full-year forecasts are ¥378,536 million in revenue and ¥41,583 million in operating profit. Achieving these evenly over the remaining 3 quarters would require approximately ¥126,179 million in revenue and ¥13,861 million in operating profit per quarter. This is merely a mechanical calculation that does not account for seasonality, but it provides a benchmark for assessing the degree of acceleration assumed from Q2 onward relative to Q1 revenue of ¥91,464 million and operating profit of ¥6,817 million.

For comparison with the year-earlier period, cumulative revenue in the first half of the fiscal year ended March 2026 was ¥205,132 million, and operating profit was ¥21,350 million. Accordingly, to return to year-on-year growth in both revenue and profit in FY2027-H1, the company must exceed at least ¥205,132 million in revenue and ¥21,350 million in operating profit. If half of the full-year forecast is used as a simple benchmark, the higher confirmation thresholds would be ¥235,000 million for revenue and ¥24,200 million for operating profit.

The company has left unchanged its full-year forecasts of ¥470,000 million in revenue, ¥48,400 million in operating profit and ¥32,200 million in profit attributable to owners of the parent. These represent planned year-on-year increases of 8.4%, 13.6% and 3.2%, respectively, but the quantitative assumptions behind the revenue and profit levels required in the second half to offset Q1's deterioration, including seasonality, have not been disclosed. In the H1 results, it will be important to check not only cumulative results, but also progress against the full-year forecasts, the extent of improvement in Q2 alone, and whether the full-year forecasts are maintained or revised.