Sankyo (6417) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 were ¥42,210 million, down 16.9% year-over-year, with net income at ¥12,503 million, down 11.2%, but business performance and sales volumes progressed as planned.

• Operating income was ¥17,273 million, down 10.0% year-over-year.

• Pachislot business saw strong growth, offsetting a significant decline in pachinko machine sales.

• The company introduced new Smart Pachislot and pachinko titles, with additional units produced for high-demand pachislot machines.

• Business performance and sales volumes progressed as planned despite market headwinds.

Financial highlights

• Gross profit margin improved by 3.6 points to 59.4%, with gross profit at ¥25.1 billion.

• EPS for Q1 FY2025 was ¥57.00, up from ¥48.48 in Q1 FY2024 (adjusted for share split).

• SG&A expenses decreased 14.5% year-over-year, with notable reductions in sales commissions and advertising.

• Total assets at quarter-end were ¥291,667 million, with shareholders’ equity ratio rising to 86.2%.

• Comprehensive income was ¥12.4 billion, a 14.1% decrease year-over-year.

Outlook and guidance

• FY2025 full-year forecast: net sales ¥180,000 million, net income ¥42,000 million, operating income ¥61,000 million, EPS ¥191.47.

• No changes to previously announced full-year guidance.

• Pachinko machine sales forecast at 247,700 units and pachislot at 119,500 units for FY 3/2025.

• Company aims to maintain top share in pachinko and strengthen position in pachislot markets.

• Performance-linked dividend policy targets a consolidated payout ratio of 40%.