KFC (3420) Q2 2026 earnings summary

Executive summary

• Revenue for the second quarter of FY2026 rose 5.2% year-over-year to ¥12.28 billion, driven by higher sales in the construction segment and reduced SG&A expenses.

• Ordinary profit surged 130.5% year-over-year to ¥319 million, with operating profit up 255.1% to ¥265 million, supported by improved gross margins and cost management.

• Net income attributable to shareholders increased 126.3% year-over-year to ¥215 million; comprehensive income rose 403.8% to ¥399 million.

• Sales growth was driven by steady progress in backlog construction, higher value-added product sales, and strong seismic-related projects.

• Some large construction projects saw profit deviations from forecasts due to early commencement of additional work.

Financial highlights

• Consolidated revenue: ¥12.28 billion (+5.2% YoY); ordinary profit: ¥319 million (+130.5% YoY); operating profit: ¥265 million (+255.1% YoY).

• Segment revenue: Fastener ¥3.59 billion (+8.6%), Civil Engineering Materials ¥3.79 billion (down 4.0% YoY), Construction ¥5.42 billion (+10.9%).

• Gross profit for the period was ¥2,831 million, up from ¥2,757 million in the prior year.

• EPS for the interim period was ¥29.26, more than double the previous year's ¥12.93.

• Cash and equivalents at period end: ¥3.97 billion, down ¥960 million from prior year-end due to tax and dividend payments.

Outlook and guidance

• Full-year forecast unchanged: revenue ¥26.5 billion (+1.6% YoY), ordinary profit ¥1.55 billion (+6.2% YoY), operating profit ¥1.45 billion (+6.7%), net income ¥1.07 billion (+7.3%).

• Growth expected from robust seismic-related construction orders and steady progress in backlog projects.

• Focus on expanding high value-added product sales, new market entry for seismic shear reinforcement, and differentiation through technical proposals.

• Risks include raw material and logistics cost inflation, and increased investment in personnel and equipment, but profit targets to be met through strengthened cost management.