LIXIL (5938) Q3 2025 earnings summary

Executive summary

• Revenue and core earnings rose year-over-year for Q3 (nine months), driven by strong renovation demand in Japan and growth in Europe and the Middle East, despite weak new housing starts and challenges in the Americas and China.

• Profit attributable to owners decreased year-over-year due to higher tax expenses and discontinued operations, but turned positive in Q3 accumulated.

• Operating and free cash flow improved significantly, with FCF up JPY 46.1 billion year-over-year.

• Total comprehensive income fell 50.7% year-over-year, reflecting lower profit and reduced foreign currency translation gains.

Financial highlights

• Revenue for nine months was JPY 1,140.5 billion, up 1.6% year-over-year; gross profit margin improved to 33.1% (+0.8pp YoY).

• Core earnings reached JPY 31.1 billion (+16.7% YoY); EBITDA was JPY 93.7 billion (+7.8% YoY); Q3 EBITDA was JPY 41.4 billion.

• EPS was JPY 14.91, down 36.9% year-over-year; profit attributable to owners was JPY 4.3 billion, down 36.8%.

• Free cash flow improved by JPY 46.1 billion year-over-year, nearing JPY 100 billion.

• SG&A expenses increased by JPY 10.3 billion, mainly due to higher IT amortization and forex impacts.

Outlook and guidance

• No revision to full-year targets due to uncertainties in U.S. structural reform and Q4 market volatility.

• Full-year revenue forecast is JPY 1,570 billion (+5.9% YoY), with core earnings projected at JPY 35 billion (+51.1%).

• Operating profit is expected to reach JPY 25 billion (+52.9%), and profit attributable to owners is forecast at JPY 8 billion (+125.1%).

• Q4 is typically 20% weaker than Q3, with additional risks from U.S. market unpredictability and Japanese regulatory changes.

• Structural reform in the U.S. expected to complete in Q4, with positive impact anticipated next fiscal year.