Sakata Seed Q1 FY2026 slides: Net profit soars 222%, overseas markets drive growth

Introduction & Market Context

Sakata Seed Corporation (TYO:1377) presented its Q1 FY2026 results on October 7, 2025, revealing exceptional performance across key financial metrics. The global seed producer, which closed at 3,580 yen per share on the presentation date, reported substantial growth in both revenue and profitability for the quarter ended August 31, 2025. The company’s stock is currently trading near its 52-week high of 3,725 yen, reflecting positive market sentiment around its performance.

Quarterly Performance Highlights

Sakata Seed reported impressive financial results for Q1 FY2026, with notable growth across all major metrics. Sales increased by 9.6% year-over-year to 23,005 million yen, while operating profit surged by 63.5% to 4,462 million yen. The company’s ordinary profit showed even stronger growth of 90.2% to reach 4,866 million yen, and net profit more than tripled with a remarkable 222.6% increase to 3,637 million yen.

As shown in the following consolidated results overview, the company also improved its gross profit margin from 66.3% to 69.7%, demonstrating enhanced operational efficiency:

The quarterly trend analysis reveals that Q1 FY2026 achieved the highest operating margin (19.4%) and ordinary profit margin (21.2%) in recent quarters, continuing a pattern of consistent growth:

Segment and Regional Analysis

The overseas wholesale segment was the primary driver of growth, with sales increasing by 12.3% to 16,774 million yen and operating profit jumping by 47.1% to 5,234 million yen. The domestic wholesale segment also performed well, with more modest growth of 4.6% in sales and 6.6% in operating profit. However, the retail segment faced challenges, with sales declining by 12.0% and operating losses widening from 117 million yen to 210 million yen.

The following breakdown illustrates performance across all business segments:

From a regional perspective, Europe & Middle East and South America were standout performers. Europe & Middle East sales grew by 16.5% to 36,308 thousand euros, while South America showed the strongest growth at 33.4% to reach 88,525 thousand Brazilian reals. North & Central America and Asia also performed well with growth of 21.3% and 13.0% respectively. The Korean market within Asia was the only significant underperformer, with sales declining by 16.3%.

Product Portfolio Overview

Vegetable seeds remain the cornerstone of Sakata Seed’s business, accounting for 74% of total sales in Q1 FY2026. Flower seeds represented 12% of sales, with materials, young plants, and other products making up the remaining 14%.

The company’s sales distribution by product and region is illustrated in the following chart:

Within the vegetable seeds category, broccoli emerged as the top-selling crop across multiple regions, showing particularly strong growth in North & Central America (+1,038 thousand USD) and Asia (+417 million JPY), though experiencing a decline in Europe & Middle East (-1,436 thousand EUR). Tomato was the second most important crop, with significant growth in Europe & Middle East (+4,858 thousand EUR).

In the flower seeds category, sunflower was the leading product in North & Central America, South America, and Asia, while pansy/viola led in Japan and lisianthus in Europe & Middle East.

Forward-Looking Statements

Sakata Seed has maintained its forecasts for FY2026, projecting full-year sales of 95,500 million yen, operating profit of 11,000 million yen, ordinary profit of 11,000 million yen, and net profit of 9,000 million yen. For the first half (Q2), the company expects to achieve sales of 45,500 million yen, operating profit of 5,000 million yen, ordinary profit of 5,000 million yen, and net profit of 4,500 million yen.

The company’s forecasts are based on exchange rate assumptions of 140 yen to the US dollar and 160 yen to the euro, reflecting a more conservative outlook compared to the rates seen in Q1 (144.82 yen/USD and 169.64 yen/EUR).

With Q1 operating profit already at 4,462 million yen (representing 40.6% of the full-year target), and particularly strong performance in overseas markets, Sakata Seed appears well-positioned to meet or potentially exceed its annual guidance, barring any significant market disruptions or adverse currency movements in the coming quarters.

Full presentation:

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