SHIFT announced its consolidated financial results for the third quarter of the fiscal year ending August 2024. The company reported sales of ¥81.143 billion, marking a significant 28.1% increase from the same period last year. However, profitability metrics saw declines, with operating profit down 14.2% to ¥7.063 billion, ordinary profit falling 15.9% to ¥7.263 billion, and net profit dropping 17.2% to ¥3.295 billion.
The sales surge reflects strong market demand and effective sales strategies, but profits were hampered by several factors. A relative delay in acquiring new contracts led to a decreased utilization rate. Additionally, one-off costs, including advisory fees for active M&A promotions, further squeezed profit margins.
Despite these challenges, key performance indicators (KPIs) such as average customer spend, number of customers, average engineer spend, and the number of engineers showed upward trends. However, some KPIs temporarily declined due to the aforementioned utilization rate issues.
Looking ahead, SHIFT forecasts sales for the fiscal year ending August 2024 to be between ¥114 billion and ¥122 billion, representing a year-on-year decrease of 8.1% to 2.5%. The company anticipates operating profit to range from ¥11.6 billion to ¥14.6 billion, and net profit from ¥7.3 billion to ¥10 billion, reflecting significant declines compared to the previous fiscal year. Earnings per share are projected between ¥415.17 and ¥568.72.
While SHIFT’s robust sales growth underscores its market strength, the pressure on profit margins highlights the need for strategic adjustments to sustain profitability.
