Kawai Musical Instruments Manufacturing (7952): FY2025 Results Summary — Net Profit Surges on FX Gains and Securities Sale as Piano Revenue Declines

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

Note on fiscal-year labels: Kawai Musical Instruments Manufacturing labels the fiscal year ended March 31, 2026 as “FY2026.3” (its 99th term) and the fiscal year ending March 31, 2027 as “FY2027.3” throughout its results presentation. Following this site’s convention, this article refers to the most recently completed fiscal year (ended March 31, 2026) as “FY2025” in the title and slug, while the tables and body text below retain the source material’s own notation (FY2025.3 = year ended March 2025, FY2026.3 = year ended March 2026, FY2027.3 = year ending March 2027). All figures are stated in millions of yen unless otherwise noted, as presented in the source material.

Kawai Musical Instruments Manufacturing reported net sales of 72,049 million yen for the fiscal year ended March 31, 2026 (FY2026.3), down 1.2% year on year and 1.3% below the company’s own plan, as lower sales of both acoustic and digital pianos offset higher revenue at the Material Processing segment. Operating profit fell 64.2% year on year to 113 million yen, missing plan by 77.4%, while profit attributable to owners of parent rose 181.7% year on year to 1,141 million yen, beating plan by 39.1%, helped by foreign exchange effects and gains on redemption of investment securities. For FY2027.3, the company forecasts a return to revenue and profit growth as musical instrument sales recover.

Consolidated Results (Full-Year Actual)

Although the Material Processing Business recorded higher revenue driven by an increase in orders, overall net sales declined reflecting lower musical instrument sales and other factors. Operating profit decreased, while profit attributable to owners of parent increased due to foreign exchange effects and gains on redemption of investment securities.

Item	FY2025.3 (Actual)	FY2026.3 (Plan)	FY2026.3 (Actual)	YoY (%)	vs. Plan (%)
Net sales	72,918	73,000	72,049	-1.2%	-1.3%
Operating profit	316	500	113	-64.2%	-77.4%
(Operating profit margin)	(0.4%)	(0.7%)	(0.2%)	–	–
Ordinary profit	474	1,200	952	+100.6%	-20.7%
(Ordinary profit margin)	(0.7%)	(1.6%)	(1.3%)	–	–
Profit attributable to owners of parent	405	820	1,141	+181.7%	+39.1%
(Profit margin)	(0.6%)	(1.1%)	(1.6%)	–	–
ROE	0.9%	1.8%	2.5%	–	–

Total assets increased to 78,879 million yen (up 4,888 million yen from the end of FY2025.3), mainly due to an increase in investment securities. Total liabilities rose to 32,134 million yen mainly due to higher borrowings, while net assets increased to 46,745 million yen mainly due to valuation differences on investment securities. The shareholders’ equity ratio was 59.3%, down 0.9 points from the end of FY2025.3.

Segment Results

The Musical Instrument Education Business recorded a larger operating loss, reflecting lower sales and a decline in the number of students. The Material Processing Business posted higher revenue, driven by increased orders from the semiconductor sector, while profit declined due to higher costs and other factors.

Segment	Metric	FY2025.3 (Actual)	FY2026.3 (Plan)	FY2026.3 (Actual)	YoY (%)	vs. Plan (%)
Musical Instrument Education	Net sales	58,379	58,000	56,492	-3.2%	-2.6%
Musical Instrument Education	Operating profit	-701	-430	-852	–	–
Musical Instrument Education	(Operating profit margin)	(-1.2%)	(-0.7%)	(-1.5%)	–	–
Material Processing	Net sales	9,729	10,000	10,343	+6.3%	+3.4%
Material Processing	Operating profit	859	800	756	-12.0%	-6.3%
Material Processing	(Operating profit margin)	(8.8%)	(8.0%)	(7.3%)	–	–
Other	Net sales	4,809	5,000	5,213	+8.4%	+4.2%
Other	Operating profit	236	200	271	+14.7%	+35.0%
Other	(Operating profit margin)	(4.9%)	(4.0%)	(4.0%)	–	–

Keyboard Musical Instruments Sales by Region

By region, Japan sales rose 1.4% year on year, supported by strong sales of GX series grand pianos following a successful rebranding and higher sales of Shigeru Kawai pianos linked to major piano competitions; the company states its domestic acoustic piano market share exceeded 50% for the first time, based on its own research. North America sales rose 1.1% year on year, supported by enhanced promotional efforts and strengthened store operations. Europe sales fell 5.4% year on year as weakened consumer sentiment amid prolonged inflation lowered sales of both acoustic and digital pianos, although profitability improved through pricing optimization. China sales fell 20.3% year on year amid continued economic stagnation, excessive market-wide inventories, and intensified price competition, though the company notes both acoustic and digital piano sales in China exceeded the prior year’s level in the second half. Sales in other regions fell 6.7% year on year, as growth in Indonesia and Central and South America was offset by declines in Taiwan, South Korea, and the Middle East.

Region	FY2025.3 (Actual)	FY2026.3 (Actual)	YoY (%)
Japan	7,275	7,378	+1.4%
North America	6,703	6,777	+1.1%
Europe	10,280	9,725	-5.4%
China	6,126	4,883	-20.3%
Other	3,853	3,597	-6.7%

FY2027.3 Forecast

The company expects increased revenue and profit driven by a recovery in sales in its key markets. By segment, the Musical Instrument Education Business is expected to post higher revenue and profit as production and sales recover, while the Material Processing Business is projected to record lower revenue and profit due to a decline in automotive-related orders.

Item	FY2026.3 (Actual)	FY2027.3 (Plan)	YoY (%)
Net sales	72,049	80,000	+11.0%
Operating profit	113	1,800	–
(Operating profit margin)	(0.2%)	(2.3%)	–
Ordinary profit	952	1,900	+99.4%
(Ordinary profit margin)	(1.3%)	(2.4%)	–
Profit attributable to owners of parent	1,141	1,600	+40.1%
(Profit margin)	(1.6%)	(2.0%)	–
ROE	2.5%	3.4%	–

Segment	Metric	FY2026.3 (Actual)	FY2027.3 (Plan)	YoY (%)
Musical Instrument Education	Net sales	56,492	65,800	+16.5%
Musical Instrument Education	Operating profit	-852	1,200	–
Material Processing	Net sales	10,343	8,900	-13.9%
Material Processing	Operating profit	756	400	-47.1%
Other	Net sales	5,213	5,300	+1.7%
Other	Operating profit	271	250	-7.7%

Shareholder Returns

The dividend per share for FY2026.3 was maintained at 95 yen, with the same amount planned for FY2027.3. The company states it will continue to maintain a progressive dividend policy and a total shareholder payout ratio of 50% or more.

Item	FY2026.3 (Actual)	FY2027.3 (Plan)
Dividend per share (yen)	95	95
Total payout ratio	71.6%	51.1%

Medium-Term Plan / Topics

The company is in the second year of its 8th Medium-Term Management Plan, the “KAWAI Ten-Year Plan,” launched in March 2025. Under the plan, it targets net sales of 90,000 million yen, operating profit of 5,000 million yen, and ROE of 5.5% for FY2028.3. Key initiatives cited include enhancing digital piano development and profitability through a U.S. development base and a new digital piano factory under construction in Indonesia, scheduled to begin operations in July 2026; launching the higher value-added “Master Series” upright pianos for overseas markets; and developing next-generation piano action models. The company also states that, over the past 10 fiscal years, it has generally generated returns on capital above its cost of equity, but that a significant decline in returns on capital over the past two fiscal years has left the market’s assessment of its profitability and growth potential low, and that it aims to achieve a price-to-book ratio of 1.0 or more at an early stage by increasing operating profit, strengthening IR activities, and clarifying its mid-to-long-term growth plan.

Item	FY2026.3 (Actual, 1st Year)	FY2027.3 (Plan, 2nd Year)	FY2028.3 (Plan, 3rd Year)
Net sales	72,049	80,000	90,000
Operating profit	113	1,800	5,000
Operating profit margin	0.2%	2.3%	5.6%
ROE	2.5%	3.4%	5.5%
Total payout ratio	71.6%	51.1%	50% or more

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.