Sankyo (6417) Q1 2027 earnings summary

Executive summary

• Net sales for Q1 FY 3/2027 were ¥33.57 billion, down 39.2% year-over-year, with operating income at ¥10.50 billion, down 56.0% year-over-year, and net income attributable to owners at ¥8.07 billion, down 53.7%, due to lower sales volumes in both pachinko and pachislot machines.

• Despite declines, progress against full-year forecasts is on track, with major title launches and strategic initiatives planned for subsequent quarters.

• Dividend policy was revised to strengthen shareholder returns, raising the payout ratio to 50% or DOE of 5%, whichever is higher, and the dividend forecast was raised to ¥100 per share.

• The pachinko market saw cautious purchasing and lower machine utilization, while pachislot demand remained stable.

• New pricing policy "SANKYO YELL PRICE" was introduced to revitalize the pachinko market.

Financial highlights

• Gross profit margin for Q1 was 60.4%, down 1.0pt year-over-year; operating margin was 31.3%, down 12.0pt.

• Net income per share was ¥40.88, compared to ¥80.36 in the prior year.

• Pachinko machine sales: 50,059 units (down 36.9% YoY); pachislot machine sales: 16,880 units (down 52.6% YoY).

• Ball bearing supply business net sales were ¥2.99 billion, down 10.2% YoY.

• Total assets as of June 30, 2026: ¥287.61 billion; total net assets: ¥249.14 billion, with a capital adequacy ratio of 86.1%.

Outlook and guidance

• Q1 results represent about 20% progress toward full-year targets, with major product launches expected to drive growth in later quarters.

• FY 3/2027 full-year forecast: net sales ¥174 billion, operating income ¥56 billion, net income ¥40 billion, with guidance unchanged.

• Dividend forecast revised upward to ¥100 per share for the year.

• Market conditions expected to remain challenging for pachinko, but stable for pachislot.