Key facts
- Nintendo's net profit for the quarter ending June was 147.4 billion yen ($931 million), up 54% from a year earlier.
- The company received a $300 million refund related to US tariffs.
- Revenue fell 10% to 517.8 billion yen.
- Nintendo shares rose 5% on Friday following the earnings report.
- Other major companies, including Apple and Amazon, have also benefited from tariff refunds.
Nintendo's latest quarterly earnings received an unexpected boost from US tariff refunds, contributing to a 54% increase in net profit to 147.4 billion yen ($931 million). This figure handily beat analyst expectations. While revenue saw a 10% decline to 517.8 billion yen, it still surpassed forecasts.
The company recorded a $300 million tariff refund, which had previously been accounted for as a cost of sales. Strong software sales, particularly from "Tomodachi Life: Living the Dream" and "Pokémon Pokopia," also supported profit margins.
Following the results, Nintendo's shares closed 5% higher on Friday, though they remain down 24% year-to-date. The company stated that the tariffs were primarily absorbed by Nintendo rather than passed on to consumers.
Nintendo is currently involved in a class-action lawsuit filed by US customers who allege the company could recover tariff costs twice. Nintendo has moved to dismiss the case, asserting customers received what they paid for.
Nintendo's situation is part of a broader trend, with companies like Apple, Amazon, and Siemens Healthineers also reporting significant benefits from tariff refunds. These companies are adopting different strategies for the refunds, ranging from reinvestment in innovation to customer reimbursements or offsetting higher costs. The refunds follow a Supreme Court ruling that invalidated certain tariffs, leading to the repayment of duties collected under those measures. Analysts caution that these refunds provide a one-time earnings boost and may not sustain profitability long-term.