Brother Industries (6448): FY2025 Results Summary — Record Sales and Net Income; Up to 20 Billion Yen Buyback for FY2026

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Brother Industries, Ltd. (6448) released its “FY2025 Financial Results / Progress on the Medium-term Business Strategy ‘CS B2027′” presentation dated May 8, 2026, covering the fiscal year ended March 31, 2026 (FY2025). Sales revenue rose 5.3% year on year to 893.5 billion yen, a new record high, on steady hardware and consumables sales in the P&S (Printing & Solutions) business, including the impact of price adjustments, strong machine tool sales in the Machinery business, and positive FX effects. Business segment profit increased 10.8% to 83.6 billion yen, operating profit increased 15.0% to 77.9 billion yen, and net income attributable to owners of the parent company reached a record 67.6 billion yen, up 23.5%. As of the third quarter of FY2025, the N&C (Network & Contents) business has been classified as discontinued operations; figures from sales revenue to income before tax exclude discontinued operations, net income is the total of continuing and discontinued operations, and prior-year figures have been reclassified on the same basis.

Consolidated Results (FY2025 Actual)

Sales revenue and profit increased mainly due to increased sales in the P&S and Machinery businesses. Despite an increase in sales promotion and SG&A expenses, business segment profit increased as a result of higher sales revenues from machine tools in the Machinery business and positive FX effects, and the additional U.S. tariff burden was fully absorbed through price adjustments and control of expenses. Despite recording FX losses, operating profit increased due to temporary proceeds such as a gain on transfer of the Karaoke Club business. Items affecting operating profit (100 millions of yen) included gains on sales of fixed assets (Q2) of +23, a gain on transfer of the Karaoke Club business of +46, an impairment loss on some fixed assets related to Printing & Automation in the IP business (Q4) of -20, structural reform expense for the P&S business (Q4) of -27, and FX losses of -69; net income also included adjustments to tax effects related to a partial transfer of XING shares in FY26 of +41. Net income reached a new record high with the addition of adjustments to tax effects in discontinued operations. Versus the previous forecast, sales revenue was 85 (1.0%) higher and business segment profit 36 (4.5%) higher, while operating profit was 21 (2.7%) lower. Average exchange rates were 150.97 yen to the U.S. dollar and 174.54 yen to the euro.

Item (100 millions of yen)	FY24 Actual (Post-Reclass)	FY25 Actual	Change	Rate of Change	Previous Forecast
Sales revenue	8,489	8,935	446	5.3%	8,850
Business segment profit	755	836	81	10.8%	800
Business segment profit ratio	8.9%	9.4%	–	–	9.0%
Other income/expense	-78	-58	20	–	-0
Operating profit	677	779	102	15.0%	800
Operating profit ratio	8.0%	8.7%	–	–	9.0%
Income before tax	725	820	94	13.0%	830
Net income from continuing operations	534	626	92	17.2%	–
Net income from discontinued operations	14	50	37	265.8%	–
Net income attributable to owners of the parent company	548	676	128	23.5%	670
USD (yen)	152.48	150.97	-1.51	–	149.99
EUR (yen)	163.62	174.54	10.92	–	173.29

Segment Results

In the P&S business, sales revenue rose to 5,706 (100 millions of yen) and business segment profit to 664, as hardware revenue increased on higher sales volumes in each region compared to the previous year, which was affected by supply constraints, together with price adjustments, while consumables and Labeling sales were firm; operating profit declined to 581 due to FX losses and other items. In the IP (Industrial Printing) business, Domino consumables were firm but Printing & Automation revenue decreased due to intensified competition, and business segment profit fell to 29 on reduced Printing & Automation revenue, higher SG&A and U.S. tariff costs; operating profit posted a loss of -17 after impairment losses and FX losses. Machinery sales revenue rose to 830 and business segment profit increased significantly to 67, as machine tool revenue grew on expanded capital investment demand in the automotive and general machinery markets, mainly in China and Asia, while industrial sewing machine revenue decreased on postponed apparel investment caused by U.S. tariffs. Nissei posted increased revenue (214) and profit (10) with steady sales of reducers and gears. P&H (Personal & Home) revenue rose to 610 on steady sales of low- and middle-end models, but profit decreased to 66 from the previous year, which had benefited from new high-end models.

Segment (100 millions of yen)	Sales revenue FY24	Sales revenue FY25	Change	Business segment profit FY24	Business segment profit FY25	Change	Operating profit FY24	Operating profit FY25	Change
P&S (Printing & Solutions)	5,448	5,706	258	610	664	55	589	581	-8
IP (Industrial Printing)	1,373	1,393	20	52	29	-23	32	-17	-49
Machinery	673	830	157	11	67	56	12	67	55
Nissei	200	214	14	5	10	5	0	10	10
P&H (Personal & Home)	572	610	38	73	66	-7	67	60	-7
Other	223	182	-41	4	0	-4	-22	78	100
Total	8,489	8,935	446	755	836	81	677	779	102

Financial Position and Cash Flows

At the end of March 2026, total assets were 10,188 (100 millions of yen), up 862 from the end of March 2025; cash and cash equivalents were 1,977 (up 249), inventories 2,340 (up 72), interest-bearing debt 10, and shareholders’ equity (equity attributable to owners of the parent company) 7,633 (up 719). Net cash was 1,967, the shareholders’ equity ratio was 74.9% (74.1% a year earlier), ROE was 9.3% (8.1%) and PBR was 0.94 (1.00). For FY2025, operating cash flow was 110.0 billion yen, investing cash flow -43.0 billion yen, free cash flow 68.0 billion yen and financial cash flow -54.6 billion yen; investing activities included the transfer of the Karaoke Club business, the acquisition of the Konrad Busche business, and the tender offer for MUTOH and its acquisition as a consolidated subsidiary. Capital expenditure was 449 (100 millions of yen) in FY25 (FY26 forecast 530), depreciation and amortization 423 (forecast 420), and R&D expenses 508 (forecast 540); these figures include discontinued operations.

FY2026 Forecast

For FY2026 (the fiscal year ending March 31, 2027), Brother forecasts sales revenue of 910.0 billion yen (+1.9% YoY) and business segment profit of 85.0 billion yen (+1.6%), with operating profit of 850 (100 millions of yen), income before tax of 875 and net income attributable to owners of the parent company of 720 (+6.4%). Although risks stemming from the situation in the Middle East, soaring parts and materials prices, and the impact of changes in U.S. tariff policies are anticipated, the company expects to increase sales revenue and profits due to business expansion in the industrial area. The forecast assumes 1USD=150 yen and 1EUR=180 yen. The original forecast before reflecting these effects was sales revenue of 9,520 and operating profit of 910 (100 millions of yen); the company has factored in risk factors of -25 billion yen (increased parts and materials costs primarily for resin and memory, increased logistics costs, decreased sales in the Middle East, and lower factory utilization and sales volume), countermeasures of +11 billion yen (reduction of expenses, control of promotional expenses, cost cutting), and U.S. tariff policy impacts assuming a flat 10% additional tariff rate until late July and 15% thereafter, with a certain extent of IEEPA tariff refunds also factored in. From FY2026, results from MUTOH HOLDINGS will be included in the Printing & Automation segment of the IP business. Due to the impact of the situation in the Middle East and other factors, regional forecasts are not being disclosed at this time, with an update planned at the first-quarter earnings announcement.

Item (100 millions of yen)	FY25 Actual	FY26 Forecast	Change	Rate of Change	Reference: Original forecast (before reflecting effects)
Sales revenue	8,935	9,100	165	1.9%	9,520
Business segment profit	836	850	14	1.6%	940
Business segment profit ratio	9.4%	9.3%	–	–	9.9%
Other income/expense	-58	0	58	–	-30
Operating profit	779	850	71	9.2%	910
Operating profit ratio	8.7%	9.3%	–	–	9.6%
Income before tax	820	875	55	6.7%	940
Net income from continuing operations	626	640	14	2.2%	700
Net income from discontinued operations	50	80	30	58.8%	80
Net income attributable to owners of the parent company	676	720	44	6.4%	780
USD (yen)	150.97	150.00	-0.97	–	150.00
EUR (yen)	174.54	180.00	5.46	–	180.00

By business segment, while impact from the situation in the Middle East and soaring parts and materials prices is expected, particularly in the P&S business, the company will pursue further growth for machine tools in the Machinery business and expand the IP business including MUTOH HOLDINGS. P&S sales revenue is forecast at 5,409 (100 millions of yen) with business segment profit of 630; IP sales revenue at 1,670 with business segment profit of 40; Machinery at 1,010 with business segment profit of 110; Nissei at 239 with profit of 11; and P&H at 630 with profit of 53.

Segment (100 millions of yen)	Sales revenue FY25 Actual	Sales revenue FY26 Forecast	Change	Business segment profit FY25 Actual	Business segment profit FY26 Forecast	Change	Operating profit FY25 Actual	Operating profit FY26 Forecast	Change
P&S (Printing & Solutions)	5,706	5,409	-297	664	630	-34	581	630	49
IP (Industrial Printing)	1,393	1,670	277	29	40	11	-17	40	57
Machinery	830	1,010	180	67	110	43	67	110	43
Nissei	214	239	25	10	11	1	10	11	1
P&H (Personal & Home)	610	630	20	66	53	-13	60	53	-7
Other	182	142	-40	0	6	6	78	6	-71
Total	8,935	9,100	165	836	850	14	779	850	71

Shareholder Returns

An annual dividend for FY2025 of 100 yen per share (interim 50 yen, year-end 50 yen) is planned, up from 84 yen for FY2024, and an annual dividend for FY2026 of 100 yen per share is also planned. Under the CS B2027 shareholder return policy, the basic policy is to implement stable and continuous shareholder returns, with a minimum annual dividend of 100 yen per share, a target dividend payout ratio of 40%, a plan to repurchase a total of 60 billion yen (3-year total) of the company’s own shares during the CS B2027 period, and consideration of additional shareholder returns depending on factors such as business performance. The company will repurchase its own shares up to 20 billion yen (up to 10 million shares, 4.02% of total shares issued excluding treasury stock) from May 11, 2026 to April 30, 2027, and will cancel the shares after the repurchase to eliminate concerns over dilution. The treasury shares acquired from May 12, 2025 to April 30, 2026 (about 20 billion yen) are scheduled to be cancelled on June 1, 2026.

Item	FY2024	FY2025 (plan)	FY2026 (plan)
Annual dividend per share (yen)	84	100	100
Interim dividend per share (yen)	–	50	50
Year-end dividend per share (yen)	–	50	50
Share repurchase	–	Approx. 20 billion yen (May 12, 2025 – April 30, 2026)	Up to 20 billion yen (May 11, 2026 – April 30, 2027)

Medium-Term Business Strategy “CS B2027” Progress

Under CS B2027, Brother aims to achieve an operating profit of 100 billion yen by clarifying the role of each business, to steadily execute growth investments of approximately 200 billion yen over three years to drive growth in the industrial area, to strengthen the technological and talent foundations, and to enhance shareholder value through management focused on cost of capital and share prices. Against the CS B2027 targets of sales revenue of 1 trillion yen, operating profit of 100.0 billion yen, ROE of 10% and TSR compared to TOPIX (including dividends) of at least 100%, FY2025 results were sales revenue of 893.5 billion yen, operating profit of 77.9 billion yen, ROE of 9.3% and TSR compared to TOPIX of 81.9%; the industrial area sales revenue ratio was 32% in FY25 results versus a 40% target. Cost of equity is 8-10%, and PBR as of the end of FY2025 was 0.94x against a five-year average of 1.00x. In strategic investments, the company launched a tender offer for MUTOH HOLDINGS in February 2026 and made it a consolidated subsidiary in March 2026, completed the acquisition of the automotive division of Konrad Busche GmbH in January 2026, completed the transfer of the karaoke club business in November 2025 and the transfer of 70% of XING shares in April 2026, and transferred the BuddyBoard business to BuddyBoard Inc. in May 2026. Growth investments in FY2025 totaled 42.9 billion yen (32.2 billion yen in strategic investments and 10.7 billion yen in foundation investments), with no changes to the three-year investment plan. The company also plans to transition to a Company with an Audit and Supervisory Committee, subject to approval at the 134th Ordinary General Meeting of Shareholders in June 2026.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.