Daiwa House Industry (1925) Q3 2026 earnings summary

Executive summary

• Net sales for FY2025 3Q reached ¥4,030.3 billion, up 2.0% year-over-year, with operating income at ¥363.6 billion, up 1.8%, but net income fell 4.8% to ¥225.4 billion due to lower ordinary income and higher extraordinary losses.

• The business environment saw moderate global growth, persistent inflation, and a decline in domestic housing starts, but consumer spending in Japan remained resilient.

• Growth was driven by strong domestic rental housing, commercial facilities, and U.S. single-family houses.

• The company advanced its 7th Medium-Term Management Plan, focusing on revenue model evolution, efficiency, and digital transformation.

• A large-scale U.S. land sale executed in October 2025 will be recognized in Q4.

Financial highlights

• Gross margin ratio improved to 21.9% (+0.7pt year-over-year), with gross profit at ¥882.7 billion.

• SG&A expenses increased 8.4% year-over-year to ¥482.6 billion.

• EPS for the quarter was ¥364.23, down 2.2% year-over-year.

• Total assets rose to ¥7,878.2 billion, and net assets increased to ¥2,821.7 billion, with net assets ratio at 34.6%.

• Debt-equity ratio was 1.15x (1.05x after hybrid financing adjustment).

Outlook and guidance

• FY2025 full-year net sales forecast remains at ¥5,600.0 billion (+3.0% year-over-year), with operating income at ¥510.0 billion (-6.6% year-over-year), and net income at ¥290.0 billion (-10.8% year-over-year).

• Adjusted for actuarial differences, operating income is expected to rise 14.6% year-over-year.

• No changes to forecasts since November 2025.

• Annual dividend per share is forecast at ¥175 (including ¥10 commemorative), with a payout ratio of 37.3%.