Itochu Posts Record Q1 Profit of ¥293.7B, Launches ¥300B Buyback on August 3

Itochu Corporation reported record first-quarter net profit of ¥293.7 billion on August 3, up 3% from a year earlier and beating market expectations by ¥294 billion. The trading house also announced a ¥300 billion share buyback program. Strong performance in non-resource businesses and a weaker yen drove results, signaling solid momentum for the fiscal year ahead.

Record earnings beat market forecasts by wide margin

Itochu’s Q1 net profit of ¥293.7 billion exceeded the average market estimate of ¥264.3 billion by ¥294 billion, or 11%. Core earnings, which exclude one-time gains and losses, surged 38% to ¥249.5 billion, also a first-quarter record for the second consecutive year. The company maintained its full-year net profit forecast of ¥950 billion, up 6% from the prior year, with Q1 representing 31% of the annual target.

Non-resource businesses drive profit growth

Non-resource segments contributed 85% of core earnings and grew 38% to ¥211.5 billion. Machinery led gains with core profit up ¥188 billion to ¥453 billion, boosted by increased stakes in Hitachi Construction Machinery and a weaker yen. The food segment, which includes FamilyMart, and textiles, including Descente, also posted strong results. Energy and chemicals posted a ¥643 billion net profit after a ¥340 billion gain from selling Itochu’s stake in Azerbaijan oil and gas developer CIECO Azer.

¥300 billion buyback signals shareholder focus

Itochu approved a share repurchase of up to ¥300 billion through January 29, 2027, representing 2.7% of outstanding shares or 190 million shares. Of this, ¥150 billion will be acquired via tender offer at ¥1,813 per share, a 10% discount to the July 31 closing price of ¥2,014. Four insurance companies, including Mitsui Sumitomo Fire and Marine Insurance, agreed to sell shares in the tender offer.

Meyka data supports continued strength

Meyka grades 8001.T as A- with a Buy recommendation based on strong DCF, ROE, and ROA scores. The stock trades at a PE ratio of 15.6x, below the historical average, with a 12-month price target of ¥6,759. RSI stands at 60.6, indicating moderate momentum, while the stock has gained 29.7% over the past year despite a 1.9% decline since the earnings announcement on August 3.

Final Thoughts

Itochu’s record Q1 profit and aggressive buyback demonstrate operational strength and shareholder commitment. With Meyka grading the stock A- and a PE of 15.6x, the data supports the company’s execution on its growth strategy in non-resource businesses.

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