JUKI CORPORATION

Business Details

A reportable segment that manufactures and sells industrial sewing machines, household sewing machines, IoT-related Systems, and other products. It operates a broad global sales network spanning Asia, Europe, the Americas, India, and beyond. Since the second half of FY2024, the segment has shifted its policy from a "revenue-focused" to a "profit-focused" approach, promoting a strategic shift toward the high-end market and optimizing production capacity through model line reduction. This core segment accounts for approximately 74% of consolidated net sales.

Recent Overview

Despite lower sales, the shift to a profit-focused approach succeeded, improving operating margin by +1.8 pt year on year

In Q1 FY2026 (ending December 2026), Sewing Machinery & Systems Business net sales decreased to ¥15,293 million (down 12.0% year on year), reflecting an intentional contraction associated with the policy shift from "revenue-focused" to "profit-focused." On the other hand, the effects of the strategic shift toward the high-end market and production capacity optimization through model line reduction materialized, with segment operating profit doubling to ¥488 million (versus ¥240 million in the same period of the prior year) and operating margin improving to 3.2% (versus 1.4% in the same period of the prior year). While demand from automotive-related customers in Europe and the US remained strong, some customers in Asia and regions west of India became more cautious about capital investment amid US reciprocal tariffs and Middle East tensions.

Key Products

Growth Drivers

• Improvement in gross margin and operating margin driven by the strategic shift toward the high-end market
• Continued strong demand from automotive-related customers in Europe and the US
• Optimization of production capacity and improved cost structure through model line reduction
• Enhanced solution proposal capability and differentiation through IoT integration
• Medium- to long-term growth in sewing demand in markets west of India
• Stabilization of earnings through transition to a "profit-focused" business model

Risks

• Increased caution in capital investment among customers in Asia and regions west of India due to US tariff policy (reciprocal tariffs)
• Risk of restrained customer investment due to uncertainty in the Middle East situation
• Risk of continued decline in net sales associated with the shift to a "profit-focused" policy
• Delayed recovery of the Chinese economy and intensifying price competition with Chinese companies
• Uncertainty in the external environment due to geopolitical risks, including the continuation of the conflicts in Ukraine and the Middle East
• Foreign exchange risk (exposure associated with global operations)