Sekisui House First-Half Operating Profit Rises 16% Despite Lower Sales

Sekisui House reported a 16.0% rise in operating profit for the six months ended July 31, 2026, even as revenue slipped from a year earlier. The Japanese homebuilder posted operating profit of ¥180.37 billion on net sales of ¥1.966 trillion, compared with ¥155.47 billion of operating profit and ¥2.015 trillion of sales in the same period last year.

The earnings improvement came from stronger profitability in several domestic businesses, especially development, rental housing management and remodeling. Gross profit increased 7.6% to ¥428.7 billion and the gross profit margin widened to 21.8% from 19.8%, more than offsetting a 2.2% rise in selling, general and administrative expenses. Operating margin consequently increased to 9.2% from 7.7%.

Sekisui House said operating profit, ordinary profit and interim profit attributable to owners of the parent all reached record highs for the period. Ordinary profit rose 23.8% to ¥169.08 billion, while profit attributable to owners of the parent increased 23.1% to ¥125.05 billion. In its second-quarter FY2026 financial results summary, the company said domestic businesses drove overall performance while recovery in its U.S. homebuilding operation remained slow.

Domestic development and housing services lifted profit

The development business produced the largest improvement. Net sales in the segment rose 24.9% to ¥366.09 billion, while operating profit more than doubled to ¥59.87 billion from ¥27.96 billion. Urban redevelopment was the biggest contributor within that group, with sales up 176.2% to ¥98.42 billion and operating profit up 437.7% to ¥27.35 billion. Sekisui House cited property sales to Sekisui House Reit, including six properties, as part of that increase.

Condominium sales fell 2.3% to ¥56.18 billion, but operating profit rose 83.8% to ¥15.74 billion. Deliveries of properties including GRAND GREEN OSAKA THE NORTH RESIDENCE and Grande Maison Shibuya Oyamacho progressed as planned, according to the company. Real estate and brokerage also improved, with sales up 5.7% and operating profit up 17.2%.

The supplied housing business added another source of earnings growth. Sales rose 4.9% to ¥472.78 billion and operating profit increased 13.3% to ¥56.78 billion. Rental housing management generated ¥41.75 billion of operating profit, up 12.7%, as Sekisui House focused on maintaining occupancy and rent levels at managed Sha Maison properties. Remodeling operating profit increased 14.8% to ¥15.04 billion as the company expanded larger renovation and energy-efficiency proposals.

Built-to-order operations were softer. Segment sales declined 2.3% to ¥660.13 billion and operating profit fell 1.6% to ¥75.69 billion. Custom detached houses recorded a 5.2% decline in operating profit as higher mortgage rates, construction costs and inflation weighed on purchaser sentiment. Rental housing and commercial buildings were nearly flat on profit, while architectural and civil engineering profit edged higher despite lower sales. Sekisui House also noted that it changed some segment classifications and the allocation of corporate expenses from the start of this fiscal year, with the prior-year comparisons presented on a reclassified basis.

U.S. homebuilding weakness remained the main drag

The overseas business moved in the opposite direction from the stronger domestic units. Overseas sales dropped 20.8% to ¥486.35 billion, and operating profit fell 93.2% to ¥1.04 billion. Sekisui House said its U.S. homebuilding business delivered fewer homes and used customer incentives as buyers remained cautious amid economic uncertainty, elevated mortgage rates and inflation.

That weakness helps explain why consolidated sales fell even though several Japanese businesses expanded. Overseas revenue was down by about ¥128 billion from a year earlier, a decline large enough to outweigh growth in development and supplied housing. The first-half results therefore show a sharper split between domestic profitability and near-term U.S. homebuilding conditions than the consolidated sales figure alone suggests.

Forward orders were stronger than current revenue. Group orders rose 9.3% to ¥2.325 trillion, while order backlog increased 19.9% to ¥2.164 trillion at July 31. Overseas orders increased 20.3% to ¥794.67 billion, and the overseas backlog more than doubled to ¥603.42 billion. Sekisui House also said four U.S. multifamily properties had been sold, with revenue from those sales scheduled to be recognized in the third quarter. Those figures provide a larger pipeline, although the timing and profitability of future revenue will still depend on deliveries, property sales and market conditions.

Full-year sales forecast cut, operating profit target held

Sekisui House lowered its full-year net sales forecast to ¥4.260 trillion from the ¥4.353 trillion plan announced in March. The revised figure would still represent 1.5% growth from the previous fiscal year. Management kept its operating profit forecast unchanged at ¥350 billion, which would be 2.5% above the prior year.

The company raised some forecasts below the operating-profit line. Its ordinary profit outlook increased to ¥316 billion from ¥314 billion, and the forecast for profit attributable to owners of the parent rose to ¥224 billion from ¥218 billion. Forecast earnings per share increased to ¥345.55 from ¥336.30, while the planned annual dividend remained ¥145 per share.

Management’s revised plan reflects opposing changes inside the group. Compared with the initial forecast, the company added ¥16.5 billion to its domestic operating-profit expectations, including increases for supplied housing and development, while cutting the overseas operating-profit plan by ¥8.5 billion. It also reduced the net sales outlook for overseas operations by ¥84 billion. Sekisui House said U.S. homebuilding remains challenging, but sales of properties in the U.S. multifamily business are progressing steadily.

The company is scheduled to file its semi-annual securities report on September 11 and begin interim dividend payments on September 30. Its investor-relations calendar lists the third-quarter FY2026 results announcement for early December, which will provide the next scheduled update on whether stronger domestic earnings and planned U.S. property sales are keeping the full-year operating-profit target on track.