Can rice-related measures and logistics costs allow the Merchandising segment's revenue growth to translate into profit?

Consolidated revenue for the first quarter of the fiscal year ending March 2027 was ¥32,355 million, up 4.6% year on year, while operating profit was ¥581 million, down 22.3%. As the Merchandising segment accounts for 96.8% of revenue, deterioration in the segment's profitability directly affects consolidated earnings. The segment reported revenue of ¥31,311 million and operating profit of ¥286 million, leaving its operating margin at approximately 0.9% based on revenue and operating profit.

As factors behind the decline in profit, the company cited promotional and pricing measures to normalize inventories ahead of the start of trading in rice produced in Reiwa 8, as well as higher logistics costs. In the Merchandising segment in the previous fiscal year, an inventory valuation loss on rice of ¥497 million also weighed on profit. Inventory and price management related to rice is therefore not a temporary factor but an ongoing issue that affects profitability. The first-quarter summary financial statements did not separately disclose promotional expenses, the gross-profit impact of pricing measures, or the increase in logistics costs.

In the cumulative second quarter of the fiscal year ending March 2026, the comparative period for the interim results, the Merchandising segment reported revenue of ¥60,648 million and operating profit of ¥1,243 million. At the next earnings release, we would like to confirm whether revenue growth was driven by sales volume or unit prices, and by how many millions of yen rice-related measures and logistics costs reduced operating profit. If operating profit falls below the ¥1,243 million recorded in the previous interim period, a substantial recovery in profitability will be required in the second half to achieve the full-year operating profit forecast of ¥2,900 million.