JANOME Corporation Q2 FY2026 earnings call

Consolidated Second Quarter Performance Summary

• Consolidated revenue for the quarter reached 17.487 billion yen, a year-over-year decrease of 493 million yen. Operating profit was 406 million yen, a year-over-year decrease of 504 million yen. Ordinary profit was 330 million yen, a year-over-year decrease of 414 million yen, and the company reported an intermediate net loss attributable to parent company shareholders of 426 million yen.
• The primary driver of lower profit was a 102 million yen decrease in gross profit from reduced revenue, concentrated in the home appliance segment. This was partially offset by a 208 million yen gross profit gain from shifted product mix toward higher-margin offerings, driven by increased sales of high-profit sewing machine models and higher Asian industrial orders.

Key Operational Initiatives for H2

• Home Appliance Segment Initiatives:
  • Launch global sales of three new sewing machine models, which had a successful domestic先行 launch starting in March 2025, expanding sales via trade show participation to grow brand value and distribution channels.
  • Strengthen digital marketing through the newly launched direct-to-consumer EC site "Sewing Marche" opened in September 2025.
  • Open the pilot shop "Bobinage famille Niigata" in October 2025, focused on expanding the sewing machine user base by creating an accessible community space for handmade crafting, growing direct customer touchpoints.
• Industrial Equipment Segment Initiatives:
  • Launch new specifications for the JR4000 Series desktop robot, meeting growing automation and labor-saving demand to expand the integrated equipment business.
  • Open a second location in India, a key growth market, to strengthen local sales and support infrastructure and build a long-term growth foundation.
  • Aggressively pursue sales price adjustments and cost reduction efforts in the die casting division to improve profitability.
• US Tariff Mitigation: The company continues to sell inventory shipped before reciprocal US tariffs took effect in H1. After this inventory is cleared, it will gradually pass new tariff costs through to product prices and implement additional cost cuts to maintain profitability.
• Capital Efficiency & Shareholder Return:
  • Maintain the planned annual dividend of 55 yen per share (15 yen increase year-over-year), with an unchanged interim dividend of 20 yen per share.
  • Plan to repurchase up to 1.5 billion yen of own shares between November 17, 2025 and November 16, 2026 to improve shareholder value.
  • Accelerate the review and sale of non-operating assets to improve capital efficiency.

1. Home Appliance Business (centered on sewing machines): Revenue decreased by 1.227 billion yen year-over-year, operating profit decreased by 357 million yen year-over-year, reporting a year-over-year decrease in both revenue and profit. Total sewing machine sales volume reached 340,000 units, a decrease of 129,000 units year-over-year. Sales volume decreased by 68,000 units in North America/Europe/Oceania, decreased by 70,000 units in Latin America/Asia/Middle East/Africa, and increased by 8,000 units in the domestic Japanese market. This segment contributed approximately 54% of total consolidated revenue (excluding industrial segment breakdown) for the quarter.
2. Industrial Equipment Business: Total revenue was 3.001 billion yen, an increase of 602 million yen year-over-year, with an operating loss of 458 million yen, representing a year-over-year increase in revenue and decrease in profit. It is split into two sub-segments:
   • Robot & Press Division: Revenue of 1.863 billion yen, operating profit of 6 million yen, reporting a year-over-year increase in both revenue and profit, supported by recovering demand in Asian markets including China and South Korea.
   • Die Casting Division: Revenue of 1.137 billion yen, operating loss of 465 million yen, reporting a year-over-year increase in revenue and decrease in profit, pressured by sustained high cost ratios.
3. IT Related Business: Revenue increased by 151 million yen year-over-year, operating profit increased by 53 million yen year-over-year, reporting a year-over-year increase in both revenue and profit, driven by stable orders from improved productivity and new customer acquisition.

• Management revised downward the full-year 2026 March fiscal year consolidated guidance to 35.0 billion yen in total revenue and 1.3 billion yen in operating profit, from prior undisclosed higher estimates.
• The downward revision reflects lower-than-expected revenue and profit in the home appliance segment, driven by harsh competitive conditions primarily in Europe and a post-strong-prior-year demand decline in Asia, even with solid mid- to high-end sewing machine sales in North America.
• While order trends for both the robot/press and die casting sub-segments of the industrial equipment business are on a recovery path amid improving corporate capital expenditure conditions, management has maintained a cautious full-year outlook as the segment has not yet generated enough profit to offset persistent high raw material and operating costs.
• The planned annual dividend and share repurchase program are maintained as announced, consistent with the company's dividend policy and shareholder return commitments.

• Intense competitive pressure in the European sewing machine market has driven significant volume declines, pressuring home appliance segment revenue and profit.
• Persistently high cost ratios and elevated logistics costs have led to large operating losses in the die casting segment, dragging down overall industrial segment performance.
• Currency headwinds: Yen appreciation against invoicing currencies reduced revenue by 426 million yen, and local currency appreciation at production bases in Taiwan and Thailand increased production costs by 158 million yen, both creating downward pressure on profit.
• New US reciprocal tariffs will increase product costs for North American sales after existing pre-tariff inventory is cleared, creating profitability risk if cost pass-through and internal cost cuts are insufficient to offset the impact.
• Post-pandemic/strong prior-year demand pullback in Asian emerging markets for sewing machines has driven sharp volume declines, contributing to underperformance relative to original forecasts.
• General overhead and logistics costs have increased year-over-year due to expanded overseas sales activities, further pressuring margins.

No question and answer section was included in the provided earning call transcript.