H2O Retailing (8242) Q1 2026 earnings summary

Executive summary

• Consolidated operating profit fell 40.6% year-over-year, mainly due to a sharp decline in Department Store Business profits and sales, impacted by lower inbound sales and store renovations.

• Net sales for 1Q FYE2026 rose 1.1% year-over-year to ¥163,644 million, while profit attributable to owners of parent dropped 85% to ¥3,980 million.

• Supermarket Business saw both sales and operating profit increase, driven by strong existing store performance.

• Comprehensive income decreased 36.5% year-over-year to ¥8,538 million.

• Profit dropped significantly due to the absence of extraordinary gains recorded in the previous year's first quarter.

Financial highlights

• Gross sales for 1Q FY2025 were ¥273.3 billion, down 1.1% year-over-year; net sales rose 1.1% to ¥163.6 billion.

• Operating profit was ¥5.5 billion, down 40.6% year-over-year; ordinary profit dropped 39.8% to ¥6.1 billion.

• Earnings per share for 1Q FYE2026 was ¥32.89, down from ¥243.37 in the prior year.

• Total assets at quarter-end were ¥707,780 million, with net assets at ¥313,192 million.

• Gross profit for 1Q FYE2026 was ¥73,221 million, nearly flat year-over-year, while SG&A expenses increased, reducing operating profit.

Outlook and guidance

• No revisions to first-half or full-year earnings forecasts; FY2025 gross sales expected at ¥1,168 billion (+0.7% YoY), operating profit at ¥30 billion (−13.9% YoY), and profit at ¥18 billion (−48.3% YoY).

• Full-year net sales forecast is ¥690,000 million, up 1.2% year-over-year, with operating profit expected at ¥30,000 million (up 13.9%) and profit attributable to owners of parent at ¥18,000 million (up 48.3%).

• Full-year EPS forecast is ¥147.28; dividend forecast for FYE2026 is ¥44.00 per share, up from ¥42.00.

• Department Store Business outlook remains uncertain, but consolidated operating profit is progressing as expected.