Japanese OEM sees Q1 profits fall nearly 30% as strong yen and higher costs bite, but keeps full-year targets in place. Environmental wins and machinery growth offer some relief.
Brother Industries reported a sharp decline in quarterly profit as the strong yen and rising costs weighed on its performance, despite growth in core business areas. However, the Japanese manufacturer of printing equipment, sewing machines, and machine tools left its full-year guidance unchanged, saying it expected to offset the impact of new US tariffs through cost controls and pricing.
In the three months to 30 June 2025, Brother’s revenue fell 0.8% year-on-year to ¥213.1 billion ($1.47 billion /€1.35 billion), down from ¥214.7 billion in the same period last year. Operating profit dropped 26.8% to ¥16.0 billion ($110 million /€102 million), while net profit fell 29% to ¥11.7 billion ($81 million /€73 million).
The company cited unfavourable foreign exchange movements and increased selling, general and administrative expenses as the main reasons for the decline. “Despite higher sales in hardware and consumables, especially in the Printing & Solutions and Machinery businesses, the strong yen significantly reduced headline revenue and profit,” the company said in a statement.
The Printing & Solutions unit, which includes printers, MFPs, and labelling equipment, recorded quarterly revenue of ¥132.3 billion ($911 million /€835 million), down 1.5% year-on-year. Segment profit fell to ¥15.2 billion ($105 million /€96 million), a 15% decline, as promotional costs rose and currency headwinds hit hard. Nonetheless, Brother retained its forecast of ¥612 billion ($4.21 billion /€3.87 billion) in segment profit for the full year.
The Industrial Printing division, including the Domino business, saw a 6.5% drop in revenue to ¥32.3 billion ($222 million /€204 million), with profit more than halving. Garment printer sales were especially weak, down over 30%.
By contrast, the Machinery segment posted a 14.6% rise in sales to ¥18.1 billion ($125 million /€114 million), supported by strong demand for machine tools and industrial sewing machines. Segment profit surged to ¥1.3 billion ($9 million /€8 million), more than quadrupling year-on-year.
Brother left its full-year revenue forecast at ¥875 billion ($6.02 billion /€5.52 billion), with net profit expected to reach ¥55 billion ($379 million /€348 million). The company also maintained its dividend forecast of ¥100 per share.
New US tariff measures, introduced in August, are expected to impose a cost burden of up to ¥16 billion ($110 million /€102 million). But the company believes this will be offset by “price increases, cost-cutting, and production adjustments.” Around 20% of Brother’s global sales come from the US market.
Brother also highlighted its environmental efforts, including an award-winning molded pulp packaging design that reduces CO₂ emissions by 33% and supports the company’s zero-plastic goals. It remains the only OEM with certified remanufacturing programmes for both inkjet and toner consumables.
