Financial Summary for Second Quarter of Fiscal Year Ending May 2026 [Japan GAAP] (Consolidated)

Overview of Financial Performance

For the second quarter of the fiscal year ending May 2026, consolidated results were net sales of JPY 477.46 billion (12.8% Year-over-Year increase), operating income of JPY 6.895 billion (21.6% YoY increase), ordinary income of JPY 7.753 billion (37.2% YoY increase), and net income attributable to owners of parent of JPY 6.99 billion (36.4% YoY increase). Sales of vegetable and flower seeds were strong, supported by the depreciation of the yen exchange rate. Gross profit increased significantly due to higher royalty income. Selling, general and administrative expenses increased mainly due to higher personnel costs; however, operating income rose. Ordinary income increased due to operating income growth and improved foreign exchange gains and losses. Net income increased due to gains on sale of investment securities and other factors.

Performance by Segment

Domestic wholesale operations posted higher revenue and profit due to increased sales of vegetable seeds and materials despite a decline in flower seed sales. Overseas wholesale operations saw significant revenue and profit growth due to increased sales of vegetable and flower seeds along with favorable foreign exchange factors. Retail operations experienced revenue and profit decreases due to overall market weakness in mail-order and home garden sectors targeting mass merchandisers. Other businesses posted revenue and profit increases due to higher sales in planting maintenance services.

Financial Position and Cash Flows

Total assets amounted to JPY 204.477 billion (up JPY 13.49 billion from previous fiscal year-end), net assets were JPY 170.52 billion (up JPY 8.751 billion), and the equity ratio was 83.2% (down 1.3%). Cash flow from operating activities increased by JPY 629.4 million, cash flow from investing activities decreased by JPY 292.2 million, and cash flow from financing activities increased by JPY 52.4 million.

Dividend Status and Earnings Forecast

The annual dividend for the fiscal year ending May 2026 is planned at JPY 75 per share, with an interim dividend of JPY 35 per share. The full-year consolidated earnings forecast anticipates net sales of JPY 101.0 billion (8.7% increase over previous year), operating income of JPY 12.5 billion (2.0% increase), and net income attributable to owners of parent of JPY 10.0 billion (3.0% increase).