Nafco sees Q2 profit surge despite revenue dip, raises full-year forecast

Nafco's second quarter interim results for the fiscal year ending March 2026 show a notable increase in profits. Operating profit surged by 206.5% year-over-year to JPY 1,833 million, while ordinary profit grew by 189.1% to JPY 1,710 million. Net income for the interim period also saw a substantial rise of 234.8% to JPY 813 million. This profit growth was achieved on operating revenue of JPY 90,993 million, a 5.8% decrease from the previous year's JPY 96,636 million. Sales revenue also decreased by 5.9% to JPY 90,609 million.

The company's full-year forecast for the fiscal year ending March 2026 projects continued strong performance, with an anticipated operating profit of JPY 2,700 million (up 213.2% year-over-year) and ordinary profit of JPY 2,763 million (up 207.8% year-over-year). Net income is expected to reach JPY 1,260 million, representing a 685.3% increase from the prior year. Revenue for the full year is projected at JPY 173,080 million.

Key factors contributing to the improved profitability include a 1.5 percentage point increase in the gross profit margin (to 34.8%) and a 4.7 percentage point reduction in selling, general, and administrative expenses as a percentage of sales (to 32.8%). The company also highlighted strategic initiatives such as a review of large furniture delivery and efforts to reduce promotional advertising expenses.