Dive Brief:
- Nissan Motor Co. reported a return to profitability in the first quarter of FY2026 following a net loss of 533.1 billion yen ($3.38 billion) in the 12-month period of FY2025 ending March 31, the automaker announced in its Q1 earnings report.
- The automaker’s year-over-year operating profit in Q1 improved by 157 billion yen and returned to positive territory following a net loss of 79 billion yen for the 2025 fiscal year, ending in March.
- Nissan said the improvements were the result of executing its Re:Nissan business strategy announced in May 2025, along with progress in manufacturing, vehicle cost reductions, favorable foreign exchange rates, improved sales performance and disciplined cost management, per the release.
Dive Insight:
“We demonstrated the impact that our actions have delivered,” Nissan President and CEO Ivan Espinosa said on the company’s earnings call. “We made measurable progress in our cost management efforts to build a new foundation for Nissan's future.”
As a result of the automaker’s Re:Nissan strategy, the company reported a combined total of $328 million in fixed and variable cost savings in Q1, achieving a 20% reduction target in engineering cost per hour three quarters ahead of schedule, Espinosa said. In total, Nissan aims to deliver around $3.1 billion in cost savings by the end of the current fiscal year, according to Espinosa.
Nissan’s operating margin also improved 5.5 points from a year ago, from negative 2.9% to 2.6%.
The automaker reported global sales of just over 700,000 vehicles in Q1. Although sales were relatively flat YoY, Espinosa said the results were solid given the current competitive environment and the ongoing conflicts in the Middle East.
In the U.S., which is Nissan’s largest global market, sales were up by 9.6% YoY in Q1, which was boosted by the Rogue and Pathfinder SUVs and the Frontier pickup. Pathfinder sales jumped by 32%, achieving the SUV’s best quarter ever in its 40-year history in the U.S. market. Nissan Rogue sales grew nearly 39%, and deliveries of the Frontier pickup increased by 35%. Nissan also plans to launch a new version of the Rogue powered by its hybrid e-Power technology later this year.
Nissan has achieved 16 consecutive months of YoY retail sales growth in the U.S. Espinosa said during the earnings call that the automaker will continue focusing its efforts on building vehicles in North America that are tariff-free and profitable.
The automaker’s CFO George Leondis, however, warned of headwinds in the earnings call. He expects continued pressure from higher raw material costs, including aluminum, copper and oil-related materials, combined with geopolitical tensions and shipping constraints that are expected to remain. It will result in higher logistics costs and pressure on vehicle volumes that could impact Nissan’s financial performance going forward.
Espinosa also noted that the China market remains a significant challenge for Nissan as well as for the broader industry. In the first half of China's fiscal year, the total industry volume declined 22% year-on-year, reflecting an increasingly competitive market, he said. From April to June, Nissan’s vehicle sales in China declined by 15%.
“We are taking actions to manage our inventory and leverage our NEV lineup to combat the industry declines in China,” Espinosa said. He added that Nissan, together with its joint venture partners in China, will manage inventories in line with the market and rebalance its sales mix to grow its NEV sales.
Espinosa said the conflict in the Middle East has driven up fuel costs in China, resulting in accelerated NEV sales in the country in 2026, which the company is working to adapt to. “This reinforces our focus on building agility and speed into the business to mitigate the impact of shifts and respond to opportunities,” he said.
Due to what it called a “challenging business environment” in the China market, Nissan revised its full-year sales outlook downward — from 3.3 million units to 3.15 million units.
Still, Nissan reaffirmed its full-year guidance targeting net revenue of roughly 13 trillion yen, an operating profit of 200 billion yen and net income of 20 billion yen following last’s year loss. Operating margin is forecast to be 1.5%.
“We are managing disruption where it exists, building momentum where we see opportunity, and executing Re:Nissan with discipline and urgency,” Espinosa said in a statement. “Our focus is unchanged: creating value for customers, improving profitability and free cash flow, and building a stronger, more resilient Nissan for the long term.”
