Q1 revenue and operating profit growth are in line with the full-year plan, but can strong first-half progress be sustained?

FY2027-Q1 revenue was ¥181,663 million and operating profit was ¥17,890 million, up 7.9% and 16.8%, respectively, from ¥168,369 million and ¥15,311 million in the year-earlier period. Ordinary profit was ¥18,794 million and profit attributable to owners of the parent was ¥12,857 million, both exceeding the year-earlier figures. The first key takeaway from these results is that operating profit growth outpaced revenue growth, rather than revenue simply increasing.

The full-year forecasts remain unchanged at ¥729,193 million for revenue, ¥66,842 million for operating profit, ¥68,825 million for ordinary profit and ¥47,321 million for net profit. Q1 progress against the full-year forecasts was approximately 24.9% for revenue and 26.8% for operating profit. Revenue was broadly in line with the 25% elapsed-quarter benchmark, while operating profit was approximately 1.9 percentage points ahead of revenue. Performance is therefore generally on track against the company’s plan at this stage.

However, Q1 included the impact of record heat in the second half of May, which boosted sales of summer merchandise. At the next interim results announcement, it will be necessary to confirm whether customer traffic and items purchased per customer continued to increase through product strength and promotional activity after summer demand from June to August had run its course. The comparison period, FY2026-H1, recorded revenue of ¥343,577 million and operating profit of ¥31,461 million. Exceeding those figures will be the first performance-based threshold.

In addition, achieving the full-year operating profit forecast requires ¥48,952 million of operating profit in the remaining 3 quarters after Q1. At the next results announcement, it will be important to assess not only whether first-half operating profit exceeds the year-earlier ¥31,461 million, but also the rationale for maintaining the ¥66,842 million full-year forecast, the profit level required in the second half and how the company explains changes in its weather assumptions.