Will first-quarter profit momentum lead to an upside for the full year?

In FY2027 1Q, operating revenue was ¥8,076 million, up 3.3% year on year; operating profit was ¥371 million, up 24.3%; ordinary profit was ¥363 million, up 22.6%; and net income for the quarter was ¥253 million, up 20.7%. Profit growth substantially outpaced revenue growth, with first-quarter earnings at least showing a pattern of higher revenue and higher profit.

Progress against the full-year forecasts was 26.9% for operating revenue, calculated as ¥8,076 million ÷ ¥30,000 million; 74.2% for operating profit, calculated as ¥371 million ÷ ¥500 million; 66.0% for ordinary profit, calculated as ¥363 million ÷ ¥550 million; and 72.3% for net income, calculated as ¥253 million ÷ ¥350 million. For operating profit, only ¥129 million in total is required over the three quarters from 2Q onward to achieve the full-year forecast, making the amount of profit accumulated in H1 an important indicator of the distance to the full-year forecast.

The 1Q operating margin was approximately 4.6%, calculated as ¥371 million ÷ ¥8,076 million, well above the 1.9% recorded for FY2026. In the prior-year 1Q, operating revenue was ¥7,818 million and operating profit was ¥298 million, producing an operating margin of approximately 3.8%. The margin therefore improved by approximately 0.8 percentage points year on year. However, retail businesses are affected by seasonality and product mix, so the reproducibility of the 1Q margin must be confirmed in H1 before treating 4.6% as the full-year earning power.

FY2026 results were operating revenue of ¥31,867 million and operating profit of ¥619 million, while FY2027 forecasts are operating revenue of ¥30,000 million and operating profit of ¥500 million, representing expected declines of 5.9% and 19.3%, respectively. Despite the strong 1Q performance, the company has not revised its forecasts, suggesting that it may have incorporated the sales environment, cost increases and seasonality for the remainder of the period. In H1, we will monitor not only how much operating profit builds above ¥500 million, but also whether revenue progress catches up with profit progress and whether the forecasts or the ¥30 annual dividend are changed.