Profit growth lags revenue growth, while the full-year forecast still calls for lower profit

FY2026-H1 revenue was ¥178,204 million, up 12.6% year on year. Operating profit was ¥12,483 million, up 5.6%, ordinary profit was ¥12,217 million, up 4.3%, and interim net profit attributable to owners of the parent was ¥8,444 million, up 5.8%. Revenue and profit both exceeded the prior-year period, but profit growth lagged revenue growth, meaning that the entire increase in revenue did not flow through to profit.

The full-year forecasts are revenue of ¥350,000 million, operating profit of ¥22,580 million, ordinary profit of ¥21,958 million and net profit of ¥15,127 million. Progress at the H1 stage was 50.9% for revenue, 55.3% for operating profit, 55.6% for ordinary profit and 55.8% for net profit. Although profit was ahead on a simple half-year basis, the amounts required in the second half are revenue of ¥171,796 million, operating profit of ¥10,097 million, ordinary profit of ¥9,741 million and net profit of ¥6,683 million. Q3 should clarify the extent to which the second-half plan has been achieved and the likelihood of meeting the full-year forecasts.

The gross profit margin fell 0.4 percentage points from 21.1% in the prior-year period to 20.7%. Higher freight and packing costs accompanying increased shipment volumes, higher personnel expenses following the July 2025 base-pay revision and increase in housing allowances, and depreciation associated with the new core system and new logistics center weighed on profit. The company has explained the direction of cost increases but has not disclosed the increases by factor for freight, personnel expenses and depreciation. Q3 should clarify whether the cost burden is temporary or structural.

The full-year operating profit forecast of ¥22,580 million is below the previous fiscal year's ¥22,816 million, and the net profit forecast of ¥15,127 million is below the previous fiscal year's ¥15,881 million. In Q3, the focus will be not only on whether revenue continues to grow year on year, but also on whether the operating margin can remain around H1's 7.0%, whether the gross profit margin improves from 20.7%, and whether the full-year profit forecasts are revised downward.