Citizen Watch : FY2026 1Q Consolidated Financial Results

August 14, 2026

Company name: CITIZEN WATCH CO., LTD. Listing: Tokyo Stock Exchange Securities code: 7762

URL: https://www.citizen.co.jp/global Representative: Yoshitaka Oji, President and CEO

Inquiries: Keiichi Kobayashi, Director, In charge of Public & Investor Relations Department Telephone: +81-42-468-4934

Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: Yes (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2026 (from April 1, 2026 to June 30, 2026)
   1. Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      Three months ended	Millions of yen 98,129 75,282	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      June 30, 2026		30.3	9,913	110.9	11,767	90.8	8,921	(2.9)
      June 30, 2025		(0.8)	4,699	0.3	6,166	(16.1)	9,186	7.5

      Note: Comprehensive income For the three months ended June 30, 2026: ¥10,449 million [161.6%]

      For the three months ended June 30, 2025: ¥3,994 million [(74.3%)]

      	Basic earnings per share	Diluted earnings per share
      Three months ended	Yen	Yen
      June 30, 2026	36.56	-
      June 30, 2025	37.67	-

   2. Consolidated financial position

   	Total assets	Net assets	Equity-to-asset ratio	Net assets per share
   As of June 30, 2026 March 31, 2027	Millions of yen 478,732 468,303	Millions of yen 306,729 302,132	% 62.2 62.6	Yen 1,220.89 1,201.61

   Reference: Shareholder's Equity

   As of June 30, 2026: ¥297,889 million As of March 31, 2026: ¥293,184 million

2. Cash dividends

   	Annual dividends per share
   	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
   	Yen	Yen	Yen	Yen	Yen
   Fiscal year ended March 31, 2026	-	23.50	-	23.50	47.00
   Fiscal year ending March 31, 2027	-
   Fiscal year ending March 31, 2027 (Forecast)		26.50	-	26.50	53.00

   Note: Revisions to the forecast of cash dividends most recently announced: Yes

3. Projected Consolidated Results for the Year ending March 31, 2027

(Percentages indicate year-on-year changes.)

Note: Revisions to the forecast of cash dividends most recently announced: Yes

1. Significant changes in the scope of consolidation during the period: None Newly included: - companies ( - )

   Excluded: - companies ( - )

2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None

3. Changes in accounting policies, changes in accounting estimates, and restatement

   1. Changes in accounting policies due to revisions to accounting standards and other regulations: None

   2. Changes in accounting policies due to other reasons: None

   3. Changes in accounting estimates: None

   4. Restatement: None

      As of	shares	As of	shares
      June 30, 2026	246,000,000	March 31, 2026	246,000,000
      June 30, 2026	2,006,479	March 31, 2026	2,006,134
      June 30, 2026	243,993,651	June 30, 2025	243,868,147

4. Number of issued shares (common shares)

   1. Total number of issued shares at the end of the period (including treasury shares)

   2. Number of treasury stock at the end of period

   3. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

• Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None

• Proper use of earnings forecasts, and other special matters

Statements above relating to financial forecasts are based on information available to the Company and certain assumptions the Company considers reasonable as of the date of the announcement of these statements. Actual results may differ materially from these forecasts, depending on a variety of factors.

Please refer to the attached "Explanation of the Consolidated Earnings Projections and Other Forecasts" on page 7 for assumptions underlying the above forecasts and precautions regarding their use.

• (Attached Documents) Index

1. OVERVIEW OF OPERATING RESULTS AND FINANCIAL POSITION 5

   1. Overview of Operating Results for the Three Months Ended June 30, 2026 5

   2. Overview of Financial Position for the Three Months Ended June 30, 2026 6

   3. Explanation of the Consolidated Earnings Projections and Other Forecasts 7

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND PRIMARY NOTES 8

   1. Quarterly Consolidated Balance Sheet 8

   2. Quarterly Consolidated Statement of Income and consolidated statement of comprehensive income 10

   3. Notes on Quarterly Consolidated Financial Statements 12

1. Overview of Operating Results and Financial Position

   1. Overview of Operating Results for the Three Months Ended June 30, 2026

      The consolidated operating results for the first three months of the fiscal year under review showed significant increases in both sales and profits, driven by better-than-expected growth in sales in the Watches and Machine Tools segments, as well as strong sales in the Devices and Components segment. Net sales totaled 98.1 billion yen (up 30.3% year on year), and operating profit reached 9.9 billion yen (up 110.9% year on year). In addition, ordinary profit increased 90.8% year on year to 11.7 billion yen, mainly reflecting increases in foreign exchange gains and the share of profit of entities accounted for using the equity method. Profit attributable to owners of parent decreased 2.9% year on year to 8.9 billion yen due to a decrease in gains on sale of investment securities.

      Watches

      In the domestic CITIZEN-branded watch market, sales of ATTESA remained strong. Additionally, sales of premium brand The CITIZEN also contributed to the growth of revenue. Looking at overseas markets, in North America, sales through travel distribution channels remained strong, in addition to leading distribution channels, such as department stores, due to the growth in sales of global sub-brands such as ATTESA and CITIZEN L, while online sales, which include sales via in-house e-commerce, also increased sharply. These factors led to significant revenue growth. In Europe, sales of global sub-brand PROMASTER and other models grew. In addition, sales of mechanical watches also remained strong mainly due to the expansion of the product line, resulting in higher revenue. In Asia, strong sales recorded mainly in Thailand and India contributed to the growth of revenue.

      Net sales of the BULOVA brand grew significantly in its mainstay North American market, driven by strong sales through travel distribution channels in addition to key distribution channels such as department stores and a sharp increase in sales via in-house e-commerce.

      Movement sales increased, supported by strong sales of mechanical movements in each region and continued solid performance in analog quartz movements.

      As a result, net sales from the overall Watches segment increased to 54.8 billion yen (up 32.1% year on year), reflecting efforts to increase brand value and enhance high value-added products. Operating profit increased to 7.1 billion yen (up 62.1% year on year), chiefly due to an increase in net sales of finished products in North America, as well as higher net sales of movements.

      Machine Tools

      In the domestic market, revenue increased reflecting the gradual recovery of automotive-related and other market conditions and an increase in sales of semiconductor-related products. Looking at overseas markets, in the Americas, sales of semiconductor-related products and medical-related products remained strong, resulting in higher revenue. In Europe, watch-related and aerospace-related sales continued to trend toward a recovery, which contributed to the growth of revenue. In Asia, sales of semiconductor-related products sharply rose in China, resulting in the growth of revenue.

      As a result, the Machine Tools segment as a whole posted an increase in sales, with net sales of 25.6 billion yen (up 35.0% year on year). Operating profit increased significantly to 3.2 billion yen (up 112.5% year on year) due to growth in net sales.

      Devices and Components

      Sales of automotive components remained on par with the previous year, as the recovery of automakers' production remained lackluster. Sales of small motors increased on the back of a gradual recovery in the market condition and steady sales of medical-related products, among other products. Sales of ceramics increased due to the strong sales of submount products, including products for optical communication. Sales of printers increased as sales of photo printers grew on the back of stable demand.

      As a result, net sales in the Devices and Components segment as a whole increased to 17.6 billion yen (up 19.5% year on year). Operating profit increased to 1.3 billion yen (up 235.9% year on year).

   2. Overview of Financial Position for the Three Months Ended June 30, 2026

      Total assets at the end of the first three months of the consolidated fiscal year under review stood at 478.7 billion yen, an increase of 10.4 billion yen from the end of the previous consolidated fiscal year. Current assets increased by 8.6 billion yen, principally due to a 2.8 billion yen increase in notes and accounts receivable - trade and a 7.0 billion yen increase in inventories. Non-current assets increased by 1.7 billion yen, mainly reflecting an increase of 0.8 billion yen in deferred tax assets.

      Liabilities increased by 5.8 billion yen from the end of the previous fiscal year, to 172.0 billion yen. This was mainly due to an increase of 5.2 billion yen in notes and accounts payable - trade.

      Net assets increased by 4.5 billion yen from the end of the previous consolidated fiscal year, to 306.7 billion yen, chiefly reflecting increases of 3.1 billion yen in retained earnings and 1.7 billion yen in foreign currency translation adjustment.

   3. Explanation of the Consolidated Earnings Projections and Other Forecasts

   In the Group's mainstay Watches, sales of the CITIZEN and BULOVA brand watches are expected to remain strong, primarily in the North American market. In addition, sales of movements, most particularly mechanical movements, also remain buoyant. In the Machine Tools segment, the favorable order environment is expected to continue, reflecting signs that capital expenditure-related demand is recovering in a range of industries and that demand for semiconductor-related products is strong. Moreover, in the Devices and Components segment, sales of mainstay products, including photo printers, remain solid.

   Based on the above, the Company has revised its full-year earnings forecasts and full-year earnings forecasts by segment to reflect the upswing in its consolidated financial results for the first three months, adjustments for the revised assumed foreign exchange rates and other matters. Details are as follows.

   Assumed foreign exchange rates for the period after the second quarter have been adjusted from 150 yen to 155 yen against the U.S. dollar and from 175 yen to 180 yen against the euro.

   Revision to consolidated financial results forecast for the full fiscal year ending March 31, 2027 (April 1, 2026

   - March 31, 2027)

   		Forecast previously announced (May 13, 2026)	Revised forecast	Change	Change (%)
   Net sales	Millions of yen	362,000	395,000	+33,000	+9.1%
   Operating profit	Millions of yen	34,500	40,500	+6,000	+17.4%
   Ordinary profit	Millions of yen	37,500	43,500	+6,000	+16.0%
   Profit attributable to owners of parent	Millions of yen	27,500	32,000	+4,500	+16.4%
   Earnings per share	Yen	112.71	131.15	-	-

   Breakdown of sales by segment

   		Forecast previously announced (May 13, 2026)	Revised forecast	Change	Change (%)
   Watches	Millions of yen	201,000	223,000	+22,000	+10.9%
   Machine Tools	Millions of yen	95,000	104,000	+9,000	+9.5%
   Devices and Components	Millions of yen	66,000	68,000	+2,000	+3.0%
   Total net sales	Millions of yen	362,000	395,000	+33,000	+9.1%

   Breakdown of operating profit by segment

   		Forecast previously announced (May 13, 2026)	Revised forecast	Change	Change (%)
   Watches	Millions of yen	25,500	29,000	+3,500	+13.7%
   Machine Tools	Millions of yen	11,500	13,500	+2,000	+17.4%
   Devices and Components	Millions of yen	4,000	4,500	+500	+12.5%
   Eliminations of general corporate	Millions of yen	(6,500)	(6,500)	+0	-
   Total operating profit	Millions of yen	34,500	40,500	+6,000	+17.4%

2. Quarterly Consolidated Financial Statements and Primary Notes

1. Quarterly Consolidated Balance Sheet

   Assets

   Current assets

   (Millions of Yen) As of March 31, 2026 As of June 30, 2026

   Cash and deposits	105,564	104,043
   Notes and accounts receivable - trade	62,048	64,912
   Electronically recorded monetary claims - operating	2,026	2,166
   Merchandise and finished goods	67,999	69,905
   Work in process	28,559	33,534
   Raw materials and supplies	25,420	25,547
   Consumption taxes refund receivable	4,198	5,054
   Other	10,430	9,760
   Allowance for doubtful accounts	(1,237)	(1,221)
   Total current assets	305,011	313,704
   Non-current assets
   Property, plant and equipment
   Buildings and structures, net	49,533	49,068
   Machinery, equipment and vehicles, net	19,872	20,981
   Tools, furniture and fixtures, net	5,559	5,272
   Land	12,333	12,340
   Leased assets, net	9,906	10,108
   Construction in progress	7,217	7,249
   Total property, plant and equipment	104,422	105,020
   Intangible assets
   Software	7,008	7,015
   Other	868	863
   Total intangible assets	7,877	7,878
   Investments and other assets
   Investment securities	39,945	40,313
   Deferred tax assets	8,562	9,394
   Other	2,562	2,503
   Allowance for doubtful accounts	(78)	(82)
   Total investments and other assets	50,992	52,129
   Total non-current assets	163,292	165,028
   Total assets	468,303	478,732

   (Millions of Yen) As of March 31, 2026 As of June 30, 2026

   Liabilities Current liabilities
   Notes and accounts payable - trade	23,616	28,860
   Electronically recorded obligations - operating	7,703	7,639
   Notes payable - facilities	10	10
   Electronically recorded obligations - non-operating	2,433	1,399
   Short-term borrowings	10,011	10,011
   Income taxes payable	4,798	5,235
   Accrued expenses	14,584	15,811
   Provision for bonuses	7,454	9,659
   Provision for bonuses for directors (and other officers)	340	-
   Provision for product warranties	1,625	1,676
   Other	14,180	12,799
   Total current liabilities	86,760	93,106
   Non-current liabilities
   Bonds payable	10,000	10,000
   Long-term borrowings	37,020	37,017
   Deferred tax liabilities	2,759	2,423
   Provision for loss on reorganization	3	3
   Retirement benefit liability	14,762	14,721
   Lease liabilities	8,946	8,950
   Provision for customs duties for prior periods	3,532	3,588
   Other	2,385	2,192
   Total non-current liabilities	79,410	78,896
   Total liabilities	166,171	172,003
   Net assets Shareholders' equity
   Share capital	32,648	32,648
   Capital surplus	34,697	34,697
   Retained earnings	157,824	160,995
   Treasury shares	(1,780)	(1,781)
   Total shareholders' equity	223,391	226,561
   Accumulated other comprehensive income
   Valuation difference on available-for-sale securities	13,283	13,148
   Foreign currency translation adjustment	53,981	55,724
   Remeasurements of defined benefit plans	2,528	2,454
   Total accumulated other comprehensive income	69,793	71,328
   Non-controlling interests	8,948	8,840
   Total net assets	302,132	306,729
   Total liabilities and net assets	468,303	478,732

2. Quarterly Consolidated Statement of Income and consolidated statement of comprehensive income Quarterly Consolidated Statement of Income

For three-month period