LIXIL (5938) Q1 2026 earnings summary

Executive summary

• Q1 FY2026 revenue was ¥364.7 billion, down 1.4% year-over-year, but core earnings and EBITDA rose sharply, driven by strong renovation demand, product mix, and margin improvements, especially in Europe, the Middle East, and Japan.

• Operating profit improved to ¥6.8 billion from a loss of ¥0.5 billion in the prior year; net loss narrowed to ¥0.5 billion from ¥5.8 billion, reflecting improved profitability and foreign exchange gains.

• Structural reforms, including withdrawal from the ceramic siding business and reorganization in Europe, are largely complete, reducing future restructuring costs.

• Despite global housing market challenges, profit margins improved due to high value-added products, price optimization, and strong renovation demand.

• Comprehensive income attributable to owners was ¥9.7 billion, up from ¥20.6 billion last year.

Financial highlights

• Gross profit increased to ¥124.8 billion from ¥117.4 billion year-over-year, with gross margin up 2.5pp to 34.2%.

• Core earnings rose to ¥9.0 billion from ¥0.6 billion; EBITDA increased by ¥7.6 billion to ¥29.4 billion.

• Operating profit reached ¥6.8 billion, reversing a loss of ¥0.5 billion in the prior year.

• Net loss for the quarter: -¥900 million, an improvement of ¥4.9 billion year-over-year.

• Basic and diluted loss per share improved to ¥-3.17 from ¥-20.39 year-over-year.

Outlook and guidance

• No change to the full-year forecast despite Q1 outperformance and ongoing market uncertainties, especially in the U.S. and China.

• FY2026 revenue forecast is ¥1,540 billion, up 2.3% year-over-year; core earnings projected at ¥35.0 billion, operating profit at ¥30.0 billion, and net profit at ¥8.0 billion.

• Full demand recovery in Europe expected from next fiscal year; U.S. and China remain uncertain due to tariffs, interest rates, and housing market conditions.

• Benefits from the sale of the bathing business expected to materialize after FY2027.

• No revision to previously announced earnings or dividend forecasts.