Daikin Industries (6367) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2025 were ¥1,213.8B, down 3.0% YoY, while operating profit rose 5.1% to a record ¥121.3B and profit attributable to owners increased 29.2% to ¥81.5B, despite global economic uncertainty and U.S./China headwinds.

• Profit growth was driven by strategic pricing, cost reductions, and commercial segment expansion, offsetting residential and Chemicals weakness.

• The business environment was challenged by U.S. tariff policy, sluggish housing investment, and weak demand in China, but supported by AI-related investment and inbound tourism in Japan.

• Strategic focus included sales/marketing, new products, supply chain, cost competitiveness, and global expansion of the Applied Systems air-conditioning business.

Financial highlights

• Q1 FY2025 net sales: ¥1,213.8B (97% YoY); operating profit: ¥121.3B (105% YoY); ordinary profit: ¥118.9B (113% YoY); profit attributable to owners: ¥81.5B (129% YoY).

• Excluding FX, net sales and operating profit rose 102% and 112% YoY, respectively.

• Comprehensive income dropped 70.2% YoY to ¥59.1B.

• Earnings per share rose to ¥278.43 from ¥215.53 YoY.

• U.S. tariffs had a direct negative impact of ¥7.5B on operating profit, offset by pricing and cost reductions.

Outlook and guidance

• Full-year FY2026 forecast unchanged: net sales ¥4,840B, operating profit ¥435B, profit attributable to owners ¥272B, EPS ¥928.95.

• Plans to accelerate six group-wide themes: sales/marketing, new products, supply chain, cost reduction, service solutions, and digital/process innovation.

• U.S. tariff impact for FY2026 expected to be slightly lower than previously forecast; mitigation through cost and pricing strategies.

• Management remains cautious due to ongoing global economic and policy risks.

• Dividend forecast for FY2026 is unchanged at ¥330 per share.