Daiwa House Industry Co., Ltd. (TSE: 1925), Japan's largest integrated housing and real estate developer, reported consolidated results for FY2026 (year ended March 31, 2026) under Japanese GAAP that showed broad-based earnings improvement. Net sales rose 2.6% year-on-year to ¥5,576,861 million, while operating profit expanded a faster 12.6% to ¥614,879 million, pushing the operating margin from 10.1% to 11.0%. Ordinary profit grew 10.9% to ¥571,971 million, and profit attributable to owners of the parent climbed 7.8% to ¥350,568 million. Earnings per share rose to ¥566.47 from ¥514.00, while return on equity came in at 12.7%.
The operating profit leverage — margin expansion despite single-digit revenue growth — reflected a favourable mix shift toward higher-margin business categories and the benefit of efficiency improvements. Comprehensive income came in at ¥388,492 million (+0.9%), tempering the headline net profit growth somewhat due to movements in valuation reserves. The equity ratio narrowed to 34.4% from 37.1% as total assets expanded to ¥8,412,419 million from ¥7,049,323 million, driven in part by significant investing activity during the year. Book value per share rose to ¥4,677.09 from ¥4,226.17, reflecting retained earnings growth and shareholder equity expansion.
Cash flow: heavy investment year with financing inflows
Cash flow from operating activities was ¥189,277 million, a substantial decline from ¥420,561 million the prior year, reflecting higher working capital consumption associated with the company's active project pipeline. Investing cash outflows totalled ¥726,053 million (vs. ¥493,370 million the prior year), pointing to stepped-up capital deployment in development and logistics assets. Financing cash inflows of ¥631,058 million (vs. an outflow of ¥44,682 million) bridged the gap, and cash and equivalents at period-end stood at ¥424,588 million (vs. ¥326,954 million).
Dividend raised to ¥175, including ¥10 anniversary special
Daiwa House raised the annual dividend to ¥175 per share for FY2026, comprising an interim dividend of ¥75 and a year-end dividend of ¥100 — the latter incorporating an ordinary year-end dividend of ¥90 plus a ¥10 commemorative dividend marking the company's 70th anniversary. This compares with ¥150 per share in FY2025 (¥70 interim + ¥80 year-end). The consolidated payout ratio rose to 30.9% from 29.2%, and the net assets dividend ratio stood at 3.9%.
FY27 guidance: revenue +4%, operating profit -35% on actuarial one-off reversal
For FY2027 (year ending March 31, 2027), Daiwa House guides for consolidated net sales of ¥5,800,000 million (+4.0%), operating profit of ¥400,000 million (−34.9%), ordinary profit of ¥342,000 million (−40.2%), and net profit of ¥227,000 million (−35.2%). The guidance decline in profit is, however, largely an arithmetic distortion: FY2026 benefited from a one-time reduction in operating expenses of ¥115,675 million related to the amortisation of pension actuarial differences. Stripping out this non-recurring item, the underlying FY2027 operating profit guidance implies a decline of only 19.9%, ordinary profit −25.0%, and net profit −16.4% — more moderate deterioration reflecting continued business investment and normalised costs. EPS guidance is ¥183.26 (post-split basis), equivalent to ¥366.51 pre-split.
2-for-1 stock split announced for October 2026
As a subsequent event, Daiwa House's Board of Directors resolved on May 13, 2026 to implement a 2-for-1 stock split of ordinary shares, with a record date of September 30, 2026 and an effective date of October 1, 2026. The FY2027 EPS guidance figure of ¥183.26 already reflects the post-split share count. No changes to accounting policies or consolidation scope changes material to the group were reported, with the exception of the addition of CRC Holdings LLC to the consolidation perimeter.
| Metric | FY2026 | FY2025 | YoY |
|---|---|---|---|
| Net sales (¥ billion) | 5,576.9 | 5,434.8 | +2.6% |
| Operating profit (¥ billion) | 614.9 | 546.3 | +12.6% |
| Ordinary profit (¥ billion) | 572.0 | 516.0 | +10.9% |
| Net profit attrib. to owners (¥ billion) | 350.6 | 325.1 | +7.8% |
| EPS (¥) | 566.47 | 514.00 | +10.2% |
| Operating margin | 11.0% | 10.1% | +0.9pp |
| ROE | 12.7% | 12.9% | −0.2pp |
| Annual dividend (¥) | 175.0 | 150.0 | +16.7% |
| FY27 net sales guidance (¥ billion) | 5,800.0 | — | +4.0% |
| FY27 operating profit guidance (¥ billion) | 400.0 | — | −34.9% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.