Sharp (6753) Q1 2025 earnings summary

Executive summary

• Brand Business delivered double-digit sales growth and over 20% increase in operating profit year-over-year, offsetting yen depreciation impacts.

• Device Business sales declined due to Asset Light Initiatives, but operating loss remained stable; overall net sales slightly decreased and operating loss narrowed.

• Net sales for Q1 FY2024 were ¥531,964 million, down 1.7% year-over-year; operating loss was ¥5,810 million, improving from ¥7,057 million loss last year.

• Ordinary and bottom-line profit fell, mainly from significant negative foreign exchange effects in non-operating items.

• Comprehensive income for the quarter was ¥24,390 million, down from ¥51,210 million in Q1 FY2023.

Financial highlights

• Q1 FY2024 net sales: ¥531.9B, down 1.7% year-over-year; operating loss: ¥5.8B (margin -1.1%).

• Ordinary loss: ¥10.1B (margin -1.9%); bottom-line loss: ¥1.2B (margin -0.2%).

• Gross profit margin improved as gross profit rose to ¥88,045 million from ¥78,738 million year-over-year.

• Cash and deposits: ¥238.1B; equity ratio: 10.1%.

• Net interest-bearing debt: ¥402.8B, up from ¥390.4B at end of March 2024.

Outlook and guidance

• FY2024/2025 forecast: net sales ¥2,100.0B (-9.6% year-over-year), operating profit ¥10.0B (margin 0.5%), ordinary profit ¥10.0B, bottom-line profit ¥5.0B, EPS ¥7.70.

• No change to full-year guidance as Q1 results are in line with plan; dividend for FY2025 undecided.

• Average exchange rate assumptions: USD/JPY 150.00, EUR/JPY 160.00.