Nissan Posts Quarterly Profit Turnaround but Cuts Full-Year Sales Forecast

Nissan Motor returned to profitability in the first quarter, but the recovery remains incomplete: net profit turned positive for the first time in two years, yet the full-year global sales target was lowered by 150,000 units.

On August 3, Nissan Motor released its financial results for the first quarter of fiscal 2026 (April to June). The report showed that net sales for the quarter amounted to 2.9642 trillion yen, a year-on-year increase of 9.5%, but below the market estimate of 3.05 trillion yen. Operating profit reached 77.89 billion yen, significantly surpassing the market estimate of 6.01 billion yen, compared to a loss of 79.1 billion yen in the same period last year. Net profit stood at 3.76 billion yen, whereas the market had previously estimated a loss of 8.85 billion yen. The operating profit margin rebounded to 2.6% from -2.9% in the same period last year.

This marks Nissan's first quarterly profit in two years. In the same period last year, Nissan reported a net loss of 115.8 billion yen. Over the past two fiscal years, Nissan has incurred substantial losses: a net loss of 670.9 billion yen in fiscal 2024 and 533 billion yen in fiscal 2025, totaling over 1.2 trillion yen.

The significant improvement in performance was primarily driven by the advancement of the "Re:Nissan" revival plan. In May 2025, Nissan unveiled this plan, announcing a global workforce reduction of 20,000 employees by fiscal 2027, consolidating vehicle manufacturing plants from 17 to 10, and cutting annual production capacity from 3.5 million units to 2.5 million units, with the goal of reducing costs by approximately 500 billion yen. Additionally, Nissan sold its Yokohama headquarters building for 97 billion yen.

The financial report indicated that the "Re:Nissan" plan generated an additional 60 billion yen in cost savings in the first quarter, mainly from reductions in variable costs and efficiency improvements in manufacturing, procurement, and R&D. In the previous fiscal year, Nissan had already cut costs by 255 billion yen. Regarding exchange rates, the depreciation of the yen contributed approximately 35 billion yen to profit growth. One-time gains related to U.S. tariffs also supported profits.

CEO Ivan Espinosa stated at a press conference in Yokohama that business restructuring measures are "progressing smoothly." He emphasized that various initiatives are ensuring the company steadily advances toward its goals, striving to achieve cumulative cost reductions of 500 billion yen by the end of the fiscal year.

Global retail sales in the first quarter totaled 701,000 units, a year-on-year decrease of 0.9%. Regional market performance varied significantly. The North American market grew by 4.2% to 328,000 units, with retail sales in the U.S. market increasing by 9.6%. Nissan has achieved year-on-year retail sales growth in the U.S. for 16 consecutive months. The Japanese market grew by 1.3% to 88,000 units, with cumulative orders for the new Kicks and Elgrand models reaching 11,000 and 8,000 units, respectively.

Sales in the Chinese market increased by 7.2% in the first quarter to 130,000 units. However, starting in April, Nissan's sales in China fell by 30.7% year-on-year. Cumulative sales in the first half of the year amounted to 237,000 units, a year-on-year decline of 15%. In the European market, sales dropped by 14.6% to 64,000 units due to intensified competition with Chinese automakers. In the Middle East, supply chains were constrained by geopolitical conflicts.

Breaking down the changes in operating profit, cost reductions contributed an improvement of approximately 33.7 billion yen, sales volume and product mix contributed about 18.3 billion yen, and exchange rates contributed around 35 billion yen, while rising raw material prices dragged profits down by approximately 23.5 billion yen. The primary support for this quarter's profit recovery came from cost reductions and exchange rates, rather than sales growth.

Despite the quarterly profit, Nissan lowered its global sales forecast for fiscal 2026 from 3.3 million units to 3.15 million units, remaining flat compared to the previous fiscal year.

However, Nissan maintained its full-year forecasts unchanged: operating profit of 200 billion yen, net profit of 20 billion yen, and revenue of 13 trillion yen. The market's previous Consensus Estimates for full-year operating profit were 152.24 billion yen, and for net profit, 31.98 billion yen. If these full-year targets are met, it will be Nissan's first annual profit since fiscal 2023.

Additionally, a magnitude 7.1 earthquake occurred in Kumamoto, Japan, last week, causing temporary suspensions of some production lines at Nissan's Kyushu plant. Espinosa stated at the press conference that the affected production volume is expected to be approximately 5,000 units. In the U.S. market, Japanese automakers continue to face tariff pressure; although tariffs have been reduced from the previous 27.5% to 15%, they remain higher than the prior 2.5%.

Following the release of the financial results, Nissan's stock price fell by 3.33% in the Tokyo market.

At the earnings briefing, Espinosa stated, "Although the business environment remains challenging, particularly in China and the Middle East, our direction is very clear. We are actively responding to changes, seizing opportunities to build momentum, and advancing the 'Re:Nissan' plan with rigor and a sense of urgency."