FY2026 Q3 Financial Results Briefing

Performance Overview

For the cumulative Q3 period of FY2026, net sales reached 768,285 million yen (up 101.8% YoY), marking the highest level for the 11th consecutive period. However, operating income was 11,355 million yen (86.7% YoY), ordinary income 11,716 million yen (85.0% YoY), and net income attributable to owners of parent for the quarter was 7,760 million yen (82.6% YoY), all falling short of the previous year and plan. The gross profit margin was 9.76%, down 0.11 points from the previous year, and SG&A expenses increased to 63,642 million yen (up 103.7% YoY). Sales growth was mainly driven by strong performance in the H&B and pet categories, expansion of exclusive and prioritized distribution products, and increased sales of large-volume and high value-added products due to higher unit prices.

Challenges, Countermeasures and Future Outlook

While sales are expanding, slowing profit margins and increasing SG&A expenses remain issues. Internal factors include the need to improve inventory turnover and strengthen in-store management, while external factors include increased center fees and rebates, plus inflation-driven rises in SG&A costs. In response, strategies will be reviewed from both customer and product perspectives, product strategies adjusted to optimize inventory, transaction processes proposed for greater efficiency, and inflation countermeasures promoted. The full-year ordinary income forecast has been revised down from 16 billion yen to 13 billion yen, recognizing this as a significant turning point due to environmental changes. The company will return to its wholesale business fundamentals to strengthen both offense and defense. In the second half, concrete measures to improve gross profit amount and suppress SG&A ratio will be implemented, aiming to achieve the year-end sales target of 1,006 billion yen.