Revenue growth continues, while the focus is on recovering the operating margin amid higher costs

FY2027-Q1 revenue rose 7.8% year on year to ¥16,976 million, while operating profit fell 14.3% to ¥1,085 million, ordinary profit fell 15.8% to ¥1,144 million, and net profit attributable to owners of the parent fell 21.1% to ¥728 million. Based on revenue and operating profit, the operating margin was approximately 6.4%, down approximately 1.6 percentage points from approximately 8.0% in the year-earlier quarter. Although revenue is growing, the continued decline in profitability is the first issue to assess in FY2027-H1.

In FY2026, the previous full fiscal year, revenue rose 7.4% year on year to ¥65,518 million, while operating profit fell 4.3% to ¥4,715 million and ordinary profit fell 4.0% to ¥4,985 million. The operating margin declined 0.9 percentage points from 8.1% to 7.2%, and the same trend continued in the current first quarter. The company said that price revisions at CoCo ICHIBANYA stores in Japan and business expansion by domestic and overseas subsidiaries drove revenue growth, but that it was unable to absorb substantial increases in costs including food procurement prices, particularly rice, and logistics expenses.

The company’s FY2027-H1 forecasts are revenue of ¥35,840 million, operating profit of ¥2,160 million, ordinary profit of ¥2,130 million, and interim net profit attributable to owners of the parent of ¥1,210 million. First-quarter revenue and operating profit had reached approximately 47.4% and 50.2%, respectively, of the H1 forecasts, while the planned H1 operating margin is approximately 6.0%. To avoid a significant deterioration from the first-quarter margin of approximately 6.4% over the full first half, the company will need to secure a certain level of profitability in Q2 as well.

However, current disclosures do not show, by factor, how many hundreds of millions of yen higher food costs, logistics expenses and personnel costs reduced operating profit, or how much price revisions and subsidiary business expansion increased it. In FY2027-H1, it will be important to see whether the year-on-year change in operating profit can be broken down, as far as possible, by amount or rate into food costs, logistics expenses, head-office SG&A, and profit or loss contributions from domestic and overseas subsidiaries.