Frozen profits halved despite higher revenue; summer recovery is the key test for FY2027-H1

Revenue for the first quarter of the fiscal year ending March 2027 was ¥15,584 million, up 8.6% year on year. Operating profit, however, fell 44.3% to ¥142 million from ¥255 million a year earlier, reducing the operating margin to approximately 0.9%. Ordinary profit was ¥142 million and net income was ¥94 million, down 46.8% and 45.6%, respectively. The next first-half results will first need to establish why higher revenue has not translated into higher profit.

By segment, Frozen business revenue rose 10.0% year on year to ¥13,819 million, while segment profit fell 49.4% to ¥118 million. The segment profit margin was approximately 0.9% of revenue. Supermarket business revenue declined 1.1% to ¥1,765 million, but segment profit increased 12.2% to ¥23 million. Accordingly, pressure on company-wide earnings is concentrated mainly in the much larger Frozen business.

The company attributed the decline in profit to sluggish sales of ice cream products due to poor weather in June, as well as higher labor and logistics costs. However, the Q1 disclosure did not break out the effects of labor costs, logistics costs, fuel costs, or price revisions, nor did it disclose the volume and unit-price components. Depreciation and amortization was reported at ¥101.391 million, but the impact of logistics-center-related costs on Q1 profit was not specified.

Because ice cream sales tend to be concentrated in the second quarter, it is too early to judge the likelihood of meeting the full-year plan based solely on Q1 weather conditions. At the first-half results, we will look for continued Frozen business revenue growth, a reduction from the 49.4% year-on-year decline in segment profit, and evidence that higher labor and logistics costs are being absorbed through price revisions and improved delivery efficiency.