Domestic retail and foodservice operations drive profit growth; Q3 focus is on the sustainability of premiumization and price realization

In the first half of the fiscal year ending November 2026, the retail business posted sales of ¥95.620 billion and operating profit of ¥8.374 billion, with operating profit up 46.0% year on year. The foodservice business posted sales of ¥93.838 billion and operating profit of ¥6.878 billion, with operating profit up 55.5%. Combined operating profit from the 2 segments reached ¥15.252 billion, with the domestic business providing significant support for the ¥20.020 billion increase in company-wide operating profit.

The main explanations for the profit increase were higher domestic sales, price increases gaining traction, the shift toward higher-value products, and more efficient supply chain management. However, the earnings figures currently available do not fully separate the contributions from higher unit prices resulting from price increases, sales volumes, and product mix. At the next earnings release, it will be important to determine whether sales growth in the retail and foodservice businesses came from volumes or from unit prices and product mix, and whether the company can explain these factors separately.

Retail sales growth was limited to 1.1% year on year, while operating profit rose 46.0%, suggesting that improved profitability may have contributed more than simple volume growth. Foodservice sales rose 5.3%, while operating profit increased 55.5%, indicating that price pass-through and premiumization, in addition to recovering sales, contributed to profit. In Q3, the key points will be whether retail operating profit exceeds ¥8.374 billion and foodservice operating profit exceeds ¥6.878 billion, or at least whether both businesses can maintain year-on-year profit growth.

If the improvement in domestic profitability is attributable only to temporary price increases, consumers' cost-saving behavior and a delayed decline in sales volumes following price increases could emerge later. At the next earnings release, it will be necessary to assess the demand response after price increases, sales volumes for core dressings, prepared foods, and processed egg products, and changes in promotional spending, in order to determine whether the improvement in domestic margins reflects sustainable product-mix improvement or a one-off pricing effect.