FY2027 February year-end 1Q: profit is ahead of revenue, with H1 to show whether full-year targets are repeatable

Operating revenue for the first quarter of the fiscal year ending February 2027 was ¥38,221 million, revenue was ¥36,740 million, and operating profit was ¥1,591 million. Revenue increased 10.2% year on year and operating profit increased 28.5%, with both operating revenue and operating profit reaching record highs for a first quarter. The operating margin on revenue was approximately 4.3%, an improvement of approximately 0.6 percentage points from approximately 3.7% in the same period of the previous year.

The full-year forecasts remain unchanged at operating revenue of ¥157,000 million and operating profit of ¥4,850 million. Comparing 1Q results simply with the full-year forecasts gives progress rates of 24.3% for operating revenue and 32.8% for operating profit, indicating that profit is advancing faster than revenue. However, retail is seasonal, and demand for air conditioners in 1Q and front-loaded demand for game consoles ahead of price revisions may not continue at the same intensity in the second half. It is therefore too early to judge full-year achievement based on progress rates alone.

In FY2026-H1, operating revenue was ¥74,770 million and operating profit was ¥2,807 million, resulting in an operating margin of approximately 3.8%. The key points are how much of the current 1Q operating margin of 4.3% can be maintained on a cumulative H1 basis, and the extent to which increases in personnel expenses, advertising expenses, logistics expenses and depreciation become apparent in 2Q. No 1Q cash flow statement has been prepared, so support from operating and investing cash flow cannot be confirmed until the H1 disclosure.

For FY2027-H1, we would like to track not only year-on-year changes in revenue and operating profit, but also cumulative progress against the full-year forecasts, the operating margin, the sales mix of private-label products and same-store sales. If operating profit in H1 increases year on year while the full-year forecasts are maintained and gross margin continues to improve, the 1Q profit lead will be easier to assess as the effect of pricing policy and product mix rather than a temporary demand factor.