Revenue growth is not translating into operating profit, making margin recovery the focus for H1

Consolidated revenue for April through June 2026 was ¥24,159 million, up ¥2,047 million, or 9.3%, from ¥22,112 million in the year-earlier period. Operating profit, however, was ¥1,058 million, down ¥81 million, or 7.1%, from ¥1,139 million. The operating margin was approximately 4.38%, down 0.77 percentage points from approximately 5.15% in the year-earlier period. Operating profit declined despite the increase in revenue, indicating that top-line growth is not translating directly into profit.

According to the company, domestic food service posted higher revenue and profit on new store openings, expansion into new formats, productivity improvements and fixed-cost reductions. Meal delivery increased the number of deliveries through new product launches and other measures, but profit declined because of higher raw-material prices and other factors. The environmental business also posted lower profit due to higher procurement unit prices. Q1 segment profit was ¥583 million for domestic food service, ¥979 million for meal delivery and ¥47 million for environmental services, while agriculture recorded a loss of ¥68 million. The decline in the consolidated operating margin cannot be assessed without examining the cost impact on meal delivery and environmental services.

At the next H1 results announcement, the key questions will be whether operating profit exceeds ¥1,058 million and whether the operating margin moves at least close to the year-earlier level of approximately 5.15%, rather than focusing only on revenue growth. As of Q1, the company had not disclosed the monetary impact by factor, such as how many millions of yen raw-material costs, logistics costs, personnel expenses and fixed-cost reductions pushed operating profit down or up. In H1, the company will need to explain separately the impact of price revisions and product mix in meal delivery, customer numbers and average spend in domestic food service, and procurement unit prices in the environmental business.