Nissan Financial Results for Q1 FY2024: Challenges and Strategic Outlook

Nissan has reported its financial results for the first quarter of the fiscal year 2024, marking a period of both challenges and strategic recalibration. Despite stable global sales, the company's profits faced pressure due to increased sales incentives and marketing expenses, particularly in the competitive U.S. market.

Financial Performance Snapshot

The financial results for the three months ending June 30, 2024, reveal a mixed picture. Consolidated net revenue increased to 2.998 trillion yen, a slight rise from the previous year's 2.9177 trillion yen. However, operating profit saw a sharp decline, dropping from 128.6 billion yen in FY23 Q1 to a mere 1.0 billion yen in FY24 Q1. This significant reduction also impacted the operating margin, which fell from 4.4% to 0.0%.

The table below provides a detailed comparison of Nissan's financial performance for the first quarter of FY23 and FY24:

Strategic Adjustments and Future Outlook

Nissan's president and CEO, Makoto Uchida, acknowledged the difficulties faced in the first quarter, highlighting the impact of intense sales competition and inventory optimization efforts. Uchida stated, "Our first quarter results were very challenging. The reasons are clear, and we have implemented measures to recover our performance."

Looking ahead, Nissan has revised its outlook for the fiscal year 2024, anticipating a more positive trajectory in the second half. The company expects to benefit from the launch of new models and refreshed volume models, which should enhance sales and profitability.

The updated fiscal-year outlook includes projections of:

• 3.65 million units in retail sales
• 3.45 million units in production
• Net revenue of 14.0 trillion yen

However, the forecasted operating profit has been adjusted downward from 600 billion yen to 500 billion yen, and net income from 380 billion yen to 300 billion yen. The assumptions for foreign exchange rates have also been revised, with expectations of 155 yen per U.S. dollar and 167 yen per euro.

Navigating Challenges with a Focus on Quality

Nissan's approach moving forward emphasizes inventory optimization in the U.S. market and a focus on enhancing the efficiency of vehicle marketing and sales (VME). Uchida added, "From the second half, we aim to maximize sales of new and refreshed models to achieve the revised forecast of sales volume and profit."

This period of recalibration and strategic focus aims to position Nissan for a stronger performance in the latter half of the fiscal year.