ONWARD Holdings (8016) Q1 2024 earnings summary

Executive summary

• Q1 FY2024 net sales rose 12.0% YoY to ¥49,907m; operating profit increased 168.3% to ¥5,380m, supported by stronger traffic, improved product-supply efficiency and a lower SG&A ratio.

• Profit attributable to owners of parent rose 83.6% to ¥3,348m, while EBITDA increased 94.5% to ¥6,545m.

Financial highlights

• Gross profit rose 17.2% to ¥28,979m; SG&A was ¥23,599m, up from ¥22,712m YoY.

• Recurring profit rose 84.3% to ¥4,861m; profit before income taxes was ¥4,709m, versus ¥3,521m a year earlier.

• Q1 gross margin was 58.1%, up 2.6pp YoY; SG&A as a share of sales was 47.3%, down 3.7pp.

• Operating margin reached 10.8%, up 6.3pp; recurring profit margin was 9.7% and net profit margin 6.7%.

Outlook and guidance

• Revised FY2024 forecasts: net sales ¥188,800m, operating profit ¥10,000m, recurring profit ¥9,000m and profit attributable to owners of parent ¥5,000m.

• Revised first-half forecasts: net sales ¥90,000m, operating profit ¥4,000m, recurring profit ¥3,400m and profit attributable to owners of parent ¥2,400m.

• FY2024 forecast EBITDA is ¥15,100m; second-half forecasts remained unchanged from initial plans.

• FY2024 full-year gross margin is forecast at 56.0% and SG&A ratio at 50.7%, versus 54.9% and 52.0% in FY2022.