DCM opened the year ending February 2027 ahead of its own quarterly plan, but not far enough ahead to make management rewrite the year. First-quarter operating revenue rose 9.8% year on year to ¥151.9bn, operating profit climbed 17.4% to ¥11.4bn and merchandise sales reached ¥149.4bn, or 101.4% of the company's plan. Even so, DCM left full-year guidance unchanged at ¥577.3bn of operating revenue and ¥31.2bn of operating profit. The contrast is sharp: the first quarter grew operating profit at 17.4%, while the full-year guide still points to only 0.6% growth and assumes just 0.4% existing-store sales growth for the year.
| Metric | Quarter ended May 31 | Comparison | Full year |
|---|---|---|---|
| Operating revenue | ¥151.9bn | +9.8% year on year | Guide unchanged at ¥577.3bn |
| Operating profit | ¥11.4bn | +17.4% year on year | Guide unchanged at ¥31.2bn |
| Recurring profit | ¥10.9bn | +19.4% year on year | Guide unchanged at ¥29.4bn |
| Merchandise sales | ¥149.4bn | 101.4% of plan | Not stated |
| Existing-store sales | +2.4% (Mar-May) | Basket +3.1%, traffic -0.7% | Assumption +0.4% |
Demand got a lift
DCM said the quarter benefited from company-cited stock-up buying tied to Middle East tensions, which lifted paint-related goods, toilet paper, wraps and rubbish bags. Warmer weather also pushed air conditioners, fans and cooling workwear. Existing-store sales rose 2.4% across March to May, with average spend up 3.1% and customer numbers down 0.7%; by May, customer traffic had turned positive.
Better profit, mixed margin optics
The consolidated gross margin slipped 0.3 percentage points from a year earlier, but the supplementary slides say Encho remodeling weighed on that comparison. Excluding Encho, DCM's home-center gross margin was 37.1%, up 0.2 points, and selling, general and administrative costs ran at 99.8% of the prior-year level despite wage increases. Private-label mix in the home-center business also rose to 30.2% from 27.9%, which management linked to stronger DCM-brand and MAXZEN sales.
A strong start, but not a new base case
Not all of the growth came from underlying store demand. DCM said higher sales also reflected the consolidation effects of Encho and Home Tech, and the filing notes that Home Tech's contribution includes January to March 2026 results because of its deemed acquisition date. The group ended the quarter with 918 stores after one opening and one closure, while notable growth came from home improvement, housekeeping and home electronics.
The practical read-through is that DCM has had a strong opening quarter, but management is not yet treating warm weather, stock-up buying and consolidation benefits as a new demand floor. A forecast upgrade will need something sturdier than one hot start.