Q1 profit progress is ahead; absorption of Q2 seasonality is the focus for FY2027-H1

In Q1 of the fiscal year ending March 2027, operating revenue was ¥114,646 million, up 4.9% year on year, and operating profit was ¥10,883 million, up 8.8%. The full-year forecasts are operating revenue of ¥400,800 million and operating profit of ¥24,000 million, implying simple progress rates of 28.6% and 45.3%, respectively. Operating revenue was ahead of the 25% share represented by one quarter of the fiscal year, while operating profit was further ahead.

To achieve the full-year forecasts, the company will need operating revenue of ¥286,154 million and operating profit of ¥13,117 million after Q1. The required average for the three quarters from Q2 to Q4 is operating revenue of ¥95,385 million and operating profit of ¥4,372 million per quarter. Rather than extrapolating Q1's strong performance directly, it will be necessary to examine the composition of Q2, which includes highly seasonal categories such as gardening and agricultural supplies, heating and fuel, and disaster-prevention products.

The company has maintained its H1 and full-year forecasts, but the available disclosure does not state specific H1 forecast amounts for operating revenue and operating profit, progress rates against the H1 forecasts or the company's own assessment against plan. Accordingly, at the FY2027-H1 results, important additional disclosure will include what percentage of the H1 plan Q1 results represent and how the company views the sales and profit levels required in Q2 alone.

Q1 operating profit margin was 9.5%, compared with 6.0% for the fiscal year ended March 2026. Since quarterly results fluctuate with product mix and seasonality, the H1 results should compare Q2 operating profit margin, gross margin and SG&A ratio with the year-earlier period to determine whether the early profit progress reflects a temporary seasonal factor or structural improvement in PB, PRO and remodeling.