Toray Industries (3402) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 FY Mar/26 fell 6.6% year-over-year to JPY 595.8 billion, with core operating income down 20.9% to JPY 29.1 billion and net profit attributable to owners of parent dropping 36.1% to JPY 17.2 billion, mainly due to weak market conditions, inventory adjustments, and U.S. tariff impacts.

• Comprehensive income dropped sharply to JPY 14.3 billion from JPY 116.8 billion year-over-year, mainly due to negative exchange differences.

• U.S. policy shifts and tariffs had a 15 billion yen negative effect factored into the full-year forecast.

• Annual dividend per share is expected to rise by JPY 2 to JPY 20; share repurchases reached JPY 80 billion (82 million shares) by July 2025.

Financial highlights

• Gross profit for the quarter was JPY 120.8 billion, down from JPY 126.5 billion year-over-year.

• Operating income declined 27.8% to JPY 27.5 billion; core operating margin decreased to 4.9% from 5.8% year-over-year.

• Free cash flow was negative at JPY 0.8 billion, down from JPY 20.6 billion in the prior year.

• Total assets rose to JPY 3,299.1 billion, liabilities increased to JPY 1,509.6 billion, and equity decreased to JPY 1,789.5 billion, mainly due to share buybacks; equity ratio declined to 50.8%.

• Capital expenditures decreased to JPY 35 billion, depreciation and amortization to JPY 32.7 billion, while R&D spending rose to JPY 18.1 billion.

Outlook and guidance

• Full-year revenue forecast for FY Mar/26 is JPY 2,670 billion, up 4.2% year-over-year, with core operating income projected at JPY 150 billion and profit attributable to owners of parent at JPY 82 billion; guidance remains unchanged.

• Dividend forecast for FY Mar/26 is JPY 20 per share, up from JPY 18 in the previous year; payout ratio expected at 37%.

• Assumed exchange rate for the remainder of the year is JPY 145 per USD.

• U.S. tariffs are expected to have a 15 billion yen negative impact on full-year results.