First-quarter revenue growth accompanied by weaker logistics margins

FY2027-Q1 operating revenue was ¥70,578 million, up ¥2,016 million, or 2.9%, year on year. Operating profit, however, was ¥3,860 million, down ¥102 million, or 2.6%. The operating margin was approximately 5.47%, down about 0.31 percentage points from approximately 5.78% a year earlier. Although revenue increased, the fact that the growth did not translate directly into operating profit is the first change to monitor in the next earnings release.

By segment, logistics operating revenue rose 2.7% year on year to ¥61,520 million. Logistics business profit, by contrast, fell 8.4% to ¥3,374 million. The company explained that outsourced handling and transportation costs, facility lease expenses and personnel costs increased in the logistics business, and that the benefits of higher volumes and improved fee collection did not absorb the higher costs. Real estate, in contrast, posted operating revenue of ¥9,416 million, up 4.7%, and business profit of ¥3,074 million, up 7.8%, partially offsetting the logistics profit decline at the consolidated level.

The change in structure also warrants attention when compared with the previous fiscal year. In FY2026, logistics operating revenue rose only 0.4% to ¥238,628 million, while business profit increased 84.4% to ¥15,116 million. The logistics business profit decline of 8.4% year on year in FY2026-Q1 does not indicate that the full-year profit improvement of the previous fiscal year has continued unchanged into FY2027. The latest earnings summary did not disclose detailed KPIs such as orders received, order backlog, volumes handled or utilization rates that would allow the cost increase to be assessed from a volume perspective.

In FY2027-H1, the key question will be whether the gap between revenue growth and profitability narrows, using logistics operating revenue of ¥61,520 million, logistics business profit of ¥3,374 million and consolidated operating profit of ¥3,860 million as reference points. In particular, it will be important to determine whether increases in facility lease expenses, personnel costs and outsourced handling and transportation costs continue to exceed operating revenue growth, and whether the benefits of appropriate pricing and productivity improvements from advanced technology are explained quantitatively.