TYO:7270

Subaru's Profit Drops 73% in 2026 Fiscal Year Over US Tariff Hit

Subaru's (TYO:7270) profit dipped in the 2026 fiscal year after feeling the brunt of the U.S. tariff hikes.The profit attributable to owners dropped 73% to 90.8 billion Japanese yen from 338.1 billion yen, with earnings per share falling year on year to 125.49 yen from 458 yen.The company attributed the decline to the impact of the additional U.S. tariffs in 2025, as well as other external factors such as the Middle East war.Subaru was among the Japanese automobile manufacturers that were negatively hit by the U.S. tariff hikes in 2025. A Nikkei Asia report in February showed that the tariffs wiped out about 2.1 trillion yen of domestic carmakers' operating income between April 2025 and December 2025, which constitutes about 30% of their operating profit.Subaru's operating profit a year earlier slumped 82% to 66.2 billion yen due to tariff-related costs of 216.6 billion yen, the report said.The U.S. tariffs on Japanese car imports jumped 27.5% in April and were reduced to 15% in September, according to the media outlet.Meanwhile, Subaru's revenue for the fiscal year ending March 31 rose 2.1% to 4.785 trillion yen from 4.686 trillion yen in the previous year due to improvements in price and mixture, offsetting the negative impact of lower unit sales and the 2-year appreciation of the yen against the U.S. dollar, the company said in its earnings report.The temporary shutdown of a production line and shipping delays caused by the Iran conflict brought down net sales by 8.5% to 2.495 trillion yen from 2.726 trillion yen in the previous year. The group's domestic unit sales were nearly flat, sliding 1.4% to 103,000 units. Overseas unit sales also declined by 4.7% to 793,000 units.The board of directors announced to pay out a dividend worth 58.50 yen per share, lower than the previous fiscal year's dividend of 67 yen per share.Despite weakened profit and sales, Subaru is confident it will maintain a strong performance amid uncertainties brought by the Middle East conflict.For the 2027 fiscal year, the group forecasted that its attributable profit will rebound, jumping 43% year on year to 130 billion yen, with an EPS of 179.59 yen. Revenue is expected to rise 8.7% to 5.200 trillion yen from a year earlier."The group will further enhance flexibility in mixed-model production, while strengthening adjustments to production and sales across markets," Subaru said in its earnings report. "Through these efforts, the group aims to maintain steady sales in the increasingly competitive U.S. market, while steadily expanding unit sales in global markets, including Japan and Canada."The company plans to repurchase up to 80 million shares, which represents 11.2% of the company's outstanding shares, for 150 billion yen.The share buyback will be implemented from May 18 this year to March 16, 2027.