Company Reports

Makita reported fiscal 2026 (ending March 2027) first-quarter sales growth of 11% year on year and a 17% increase in operating profit. Against its weighted-average currency basket, the yen depreciated 14% from the prior-year quarter. The shares dropped 10% the following day.

Makita focuses on serving professionals, such as carpenters, by opening sales and service locations close to specialty hardware stores. This allows them to sell their power tools and equipment directly to tradespeople. As a result, the company can quickly repair and return the equipment to these customers, who demand reliability in both products and service. We anticipate that Makita will maintain its strong 60% market share in Japan and will compete closely with Robert Bosch for the top spot in Europe, where both companies are estimated to hold around 10% of the market. We expect Makita to continue generating about 16% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita reported record fiscal 2025 (ended March 2026) revenue of JPY 778 billion and guided fiscal 2026 (ending March 2027) sales of JPY 820 billion with a flat 13.4% operating margin. Shares rose 8% on April 30.

Makita focuses on serving professionals, such as carpenters, by opening sales and service locations close to specialty hardware stores. This allows them to sell their power tools and equipment directly to tradespeople. As a result, the company can quickly repair and return the equipment to these customers, who demand reliability in both products and service. We anticipate that Makita will maintain its strong 60% market share in Japan and will compete closely with Robert Bosch for the top spot in Europe, where both companies are estimated to hold around 20% of the market. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita's December-quarter sales and operating profit fell 0.8% and 2.7% quarter on quarter, respectively. It raised fiscal 2025 (ending March 2026) guidance by 4% to JPY 760 billion in sales and by 5% to JPY 100 billion in operating profit. Shares jumped 15% the next trading day.

Makita focuses on serving professionals, such as carpenters, by opening sales and service locations close to specialty hardware stores. This allows them to sell their power tools and equipment directly to tradespeople. As a result, the company can quickly repair and return the equipment to these customers, who demand reliability in both products and service. We anticipate that Makita will maintain its strong 60% market share in Japan and will compete closely with Robert Bosch for the top spot in Europe, where both companies are estimated to hold around 20% of the market. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita focuses on serving professionals, such as carpenters, by opening sales and service locations close to specialty hardware stores. This allows them to sell their power tools and equipment directly to tradespeople. As a result, the company can quickly repair and return the equipment to these customers, who demand reliability in both products and service. We anticipate that Makita will maintain its strong 60% market share in Japan and will compete closely with Robert Bosch for the top spot in Europe, where both companies are estimated to hold around 20% of the market. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita's September-quarter sales and operating profit fell 0.4% and 15.4% year on year, respectively, hit by weak North American demand amid tariff concerns. The company raised fiscal 2025 (ending March 2026) guidance, sales by 4% to JPY 730 billion, and operating profit by 28% to JPY 95 billion.

Makita's June-quarter sales fell 3.8% year on year due to Japanese yen appreciation. However, operating profit rose 20.4%, driven by reduced promotional spending and lower material costs, including batteries.

Makita focuses on serving professionals, such as carpenters, by opening sales and service locations close to specialty hardware stores. This allows them to sell their power tools and equipment directly to tradespeople. As a result, the company can quickly repair and return the equipment to these customers, who demand reliability in both products and service. We anticipate that Makita will maintain its strong 60% market share in Japan and will compete closely with Robert Bosch for the top spot in Europe, where both companies are estimated to hold around 20% of the market. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita's companywide revenue marked 2.4% year-on-year growth to JPY 753 billion in fiscal 2024 (ended March 2025) which aligned with our estimate. Operating profit reached JPY 107 billion or a margin of 14.2%, surpassing our estimates of JPY 93 billion or a margin of 12.3%, as operating margin in Europe improved significantly to 9.5% from 4.8% in fiscal 2023. The companywide improvement in operating margin of 5.3 percentage points year over year suggests that the overstock issue across the regions has faded away, and the recovery of utilization rate is on track. While we cut our companywide revenue estimate by 3% in fiscal 2025, primarily due to a 15% downward revision of North American sales, we maintain our fair value estimate for narrow-moat Makita at JPY 5,000 as our midterm outlook that Makita will retain its leading position, with a competitive products lineup in key markets such as Europe, remains intact.

Makita’s business model emphasizes servicing professionals like carpenters by setting numerous sales and service branches near local specialty hardware stores that sell the company’s power tools and other equipment mainly to tradespeople. As a result, the company can quickly repair and deliver the equipment back to the tradespeople, who demand reliability in both products and service. In the power tools market, we expect Makita to maintain its dominant share of about 60% in Japan while competing for the leading position in Europe with Robert Bosch, where we estimate both have about 20% share. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

We raise our fair value estimate for narrow-moat Makita to JPY 5,000 per share from JPY 4,790, reflecting its stronger-than-expected margin recovery. The share price is currently under pressure on the back of the macroeconomic environment in key markets such as Germany, which is still weak. However, our midterm outlook for Makita remains intact. We expect the company will gradually improve its operating margin to 13.5% by fiscal 2028, compared with 3.7% and 8.9% in fiscal 2022 and 2023, respectively, as cost reductions continue and the utilization rate gradually picks up. We view Makita's shares as undervalued.

Makita’s business model emphasizes servicing professionals like carpenters by setting numerous sales and service branches near local specialty hardware stores that sell the company’s power tools and other equipment mainly to tradespeople. As a result, the company can quickly repair and deliver the equipment back to the tradespeople, who demand reliability in both products and service. In the power tools market, we expect Makita to maintain its dominant share of about 60% in Japan while competing for the leading position in Europe with Robert Bosch, where we estimate both have about 20% share. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita’s business model emphasizes servicing professionals like carpenters by setting numerous sales and service branches near local specialty hardware stores that sell the company’s power tools and other equipment mainly to tradespeople. As a result, the company can quickly repair and deliver the equipment back to the tradespeople, who demand reliability in both products and service. In the power tools market, we expect Makita to maintain its dominant share of about 60% in Japan while competing for the leading position in Europe with Robert Bosch, where we estimate both have about 20% share. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Makita’s business model emphasizes servicing professionals like carpenters by setting numerous sales and service branches near local specialty hardware stores that sell the company’s power tools and other equipment mainly to tradespeople. As a result, the company can quickly repair and deliver the equipment back to the tradespeople, who demand reliability in both products and service. In the power tools market, we expect Makita to maintain its dominant share of about 60% in Japan while competing for the leading position in Europe with Robert Bosch, where we estimate both have about 20% share. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

Narrow-moat Makita's September-quarter operating income of JPY 30 billion, or an operating margin of 15.6%, exceeded our expectations of JPY 20 billion, or an operating margin of 11.0%, driven by strong sales growth in Europe, a better-than-expected product mix and cost reduction initiatives. Following the solid results, the company raised its operating income guidance for fiscal 2024 (ending March 2025) to JPY 85 billion from JPY 75 billion. While we do not believe the strong sales momentum is maintainable, we are encouraged by the improving profitability and thus raise our operating income forecasts for fiscal 2024 and 2025 to JPY 90 billion and JPY 96 billion from JPY 80 billion and JPY 92 billion, respectively, and our fair value estimate for Makita to JPY 4,790 from JPY 4,600. We believe Makita's medium-term outlook is priced in, and the shares are fairly valued.

Makita's June quarter operating income of JPY 21 billion surpassed our previous estimate, as we had expected weaker sales/utilization levels in Europe (where approximately half of the company's revenue is generated) amid headwinds. Nevertheless, despite the 5% decline in overseas sales on a local currency basis, which suggests that power tool/outdoor power equipment demand remains sluggish, sales in Europe beat our expectation and were flat on a local currency basis. Based on a slightly improved outlook in Europe, we raise our fiscal 2024 (ending March 2025) operating income estimate by 7% to JPY 80 billion, underpinned by 2% revenue growth and 10.5% operating margin. However, we leave our fair value estimate unchanged at JPY 4,600, as we continue to expect headwinds in other key regions like North America and Asia before a demand recovery in fiscal 2025. We believe Makita's shares are fairly valued currently.

Makita’s business model emphasizes servicing professionals like carpenters by setting numerous sales and service branches near local specialty hardware stores that sell the company’s power tools and other equipment mainly to tradespeople. As a result, the company can quickly repair and deliver the equipment back to the tradespeople, who demand reliability in both products and service. In the power tools market, we expect Makita to maintain its dominant share of about 60% in Japan while competing for the leading position in Europe with Robert Bosch, where we estimate both have about 20% share. We expect Makita to continue generating about 17% of revenue in Japan and about half of revenue in Europe (including all products) as it leverages its well-recognized brand and service network.

While Makita's sluggish March-quarter sales in local currency and guidance for a 4% revenue decline in fiscal 2024 (ending March 2025) suggest that the recovery in North America is slower than we had expected, we are encouraged that the company expects operating margin of 10.6% in fiscal 2024, implying a 1.7-percentage-point increase from last year. This supports our view that narrow-moat Makita will improve profitability despite near-term headwinds, aided by price raises and a pickup in capacity utilization. During the earnings call, the company said its inventory levels are normalized at 9 months, down from the peak of 11.7 months a year and a half ago. Accordingly, we expect capacity utilization to gradually increase and drive Makita’s margin expansion.