Decline in sales and operating loss in the health foods business

「OEM jelly orders remained solid throughout the fiscal year, resulting in higher sales year on year. The cost ratio improved from the same period of the previous year as the factory operating rate remained high. The company completed its withdrawal from this business as scheduled at the end of the fiscal year.」

「Although the company had anticipated a decline in sales due to the impact of the business withdrawal announced on 13 June 2025, sales increased year on year as orders remained solid. Despite the significant increase in outsourced processing costs, the cost ratio remained below the initially projected level because the factory operating rate remained high.」

「Revenue continued to increase year on year from the previous quarter, mainly due to growth in sales of the new large-volume OEM project launched in the third quarter of the previous fiscal year. The improvement in the cost ratio also continued, supported by the higher factory operating rate during the previous fiscal year and the revision of selling prices. As a result, higher sales and the improved cost ratio increased gross profit. Selling, general and administrative expenses increased as development expenses rose due to investment to strengthen development capabilities. As a result, revenue in the health food business was ¥523.451 million, up ¥144.611 million, or 38.2%, from the previous interim accounting period, while operating profit was ¥5.021 million, an improvement of ¥32.942 million from the previous interim accounting period, which recorded an operating loss of ¥27.920 million.」

「In addition to signs of recovery in orders for some mainstay OEM products that had declined year on year, the launch of a new large-volume OEM project in February also contributed to higher sales for the business as a whole. The manufacturing cost ratio also improved markedly from the beginning of the current fiscal year, owing to improved manufacturing efficiency from a higher factory operating rate and the continued passing on of higher raw material purchase prices to selling prices.」

「Although orders declined for some mainstay OEM products, the business as a whole secured sales at approximately the same level as the same period of the previous year through the acquisition of new projects. The manufacturing cost ratio also showed an overall improving trend as the factory operating rate increased from the second quarter, and this trend is expected to continue. As a result, revenue in the health food business was ¥378.840 million, up ¥1.554 million, or 0.4%, from the same period of the previous year, while operating loss was ¥27.920 million, compared with an operating loss of ¥38.723 million in the same period of the previous year.」

「Sales declined from the same period of the previous year, mainly due to weak orders for some mainstay OEM products. The company's own products for television shopping performed well in large-scale campaigns and remained solid. As a result, revenue in the health food business was ¥214.829 million, down ¥26.111 million, or 10.8%, from the same period of the previous year, while operating loss was ¥17.457 million, a decline of ¥16.746 million from the same period of the previous year, which recorded an operating loss of ¥0.711 million.」

「For OEM jelly products, orders declined because sales by the contracting customers for several existing products, including mainstay products, were weak. Although the company proceeded with the launch of new OEM projects and sales of its own products through television shopping remained strong, this was insufficient to offset the aforementioned decline in sales. Profit also declined as the decrease in sales reduced the factory operating rate.」

「Although the company had initially expected orders for the OEM product launched in the previous fiscal year to remain sluggish, the decline in orders for existing products and delays in launching new projects also contributed to a substantial decline in sales compared with the same period of the previous year. The gross profit margin also declined due to lower production volumes, resulting in lower profit.」

「Sales of the relatively large OEM product launched in the same period of the previous year were sluggish, and orders declined as anticipated. Several existing products also experienced declining orders. Although the company converted several new beauty and health-related projects into sales and sales of its own products remained strong, these were insufficient to offset the decline.」

「Sales declined from the same period of the previous year because a relatively large OEM new product began selling during the same period of the previous year. The company's own products for television shopping performed well in large-scale campaigns and remained strong. As a result, revenue in the health food business was ¥240.941 million, down ¥60.486 million, or 20.1%, from the same period of the previous year, while operating loss was ¥0.711 million, a decline of ¥40.274 million from the same period of the previous year, which recorded operating profit of ¥39.563 million.」

「Sales of OEM jelly products to existing customers and the acquisition of new projects both remained generally solid. In addition, from the second half of the fiscal year, the company introduced and adjusted equipment to partially automate the manufacturing process and worked to improve manufacturing efficiency. As a result, revenue in the health food business was ¥823.998 million, up ¥24.361 million, or 3.0%, from the same period of the previous year, while operating profit was ¥1.238 million, an improvement of ¥45.421 million from the same period of the previous year, which recorded an operating loss of ¥44.182 million.」

「Sales of OEM jelly products to existing customers remained generally solid, while the acquisition of new customers and projects progressed steadily, resulting in higher sales. The increase in sales improved the gross profit margin and secured segment profit. As a result, revenue in the health food business was ¥667.817 million, up ¥97.621 million, or 17.1%, from the same period of the previous year, while operating profit was ¥21.862 million, an improvement of ¥74.224 million from the same period of the previous year, which recorded an operating loss of ¥52.361 million.」

「Sales of OEM jelly products to business partners engaged in mail-order sales remained strong. In addition, the company continued to acquire new projects for T-pouch and shot-type products, and sales gradually increased. As a result, revenue in the health food business was ¥487.989 million, up ¥106.666 million, or 28.0%, from the same period of the previous year, while operating profit was ¥40.247 million, an improvement of ¥80.900 million from the same period of the previous year, which recorded an operating loss of ¥40.652 million.」

「For OEM jelly products, sales to business partners engaged in mail-order sales remained strong, as in the previous fiscal year, and the company also acquired a new large-volume project. New projects for T-pouch and shot-type products also gradually increased. As a result, revenue in the health food business was ¥301.427 million and operating profit was ¥39.563 million.」

「Revenue declined substantially, mainly due to the impact of a large-volume OEM jelly product whose sales ended in the previous fiscal year and the withdrawal from tablet-related products.」

「Due mainly to the discontinuation of manufacturing tablet-related products and the impact of an OEM jelly product whose sales ended in the previous fiscal year, sales for the business as a whole during the first 3 quarters of the fiscal year were below those of the same period of the previous year. As a result, revenue in the health food business was ¥570.195 million and operating loss was ¥52.361 million.」