LIXIL (5938) Q3 2025 earnings summary

Executive summary

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

• Profit attributable to owners of the parent decreased year-over-year due to higher tax expenses and discontinued operations, but turned positive for the accumulated Q3 period.

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

• Overseas, Europe benefited from structural reforms, while the U.S. faced shipment disruptions from a cyber incident and ongoing structural challenges.

Financial highlights

• Revenue for Q3 (nine months) was JPY 1,140.5 billion, up 1.6% year-over-year; core earnings were JPY 31.1 billion, up 16.7% year-over-year.

• EBITDA increased to JPY 93.7 billion from JPY 87 billion last year; Q3 EBITDA was JPY 41.4 billion.

• Gross profit margin improved to 33.1% year-to-date and 33.9% in Q3, up from 32.3% last year.

• Profit attributable to owners of the parent was JPY 4.3 billion, down 36.8% year-over-year.

• Basic EPS for the nine months was JPY 14.91, down from JPY 23.62 year-over-year.

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%).

• 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.

• Europe expected to recover by 2026, with pent-up demand and renovation opportunities.

• Full-year basic EPS guidance is JPY 27.86.