Hikari Food Service Co., Ltd.

Business Details

Based in Nagoya City, Aichi Prefecture, the company operates four brands: "Yakiton Daikoku," "Tachinomi Uotsubaki," "Yokohama Iekei Ramen Kanayamaya," and "Yakiniku Marui Seinikuten." It achieves low unit prices and high table turnover through a small 10-tsubo box shop / standing-bar (tachinomi) style, mainly targeting single salaried workers in their 30s to 50s. The company operates through three formats—directly managed stores, contracted-operation stores, and franchise (FC) stores—and had 67 stores (including 17 franchise stores) as of the end of May 2026. A central kitchen centrally manages the procurement and processing of ingredients, ensuring quality and hygiene control.

Recent Overview

Interim revenue up 14.6% and operating profit up 36.4%, marking substantial growth in both revenue and profit, with the full-year forecast left unchanged

In the first half of FY2026 (ending November 2026, covering December 2025 to May 2026), the company achieved significant growth across all profit lines, with revenue of ¥1,632 million (up 14.6% year on year), operating profit of ¥180 million (up 36.4%), and interim net profit of ¥137 million (up 55.0%). During the interim period, one new franchise store opened while two directly managed stores closed, bringing the total store count at period-end to 67 (including 17 franchise stores). In May, the company participated in the "FREEDOM NAGOYA 2026" music festival held in Nagoya City to expand brand awareness and strengthen talent recruitment. The full-year earnings forecast (revenue of ¥3,200 million, operating profit of ¥242 million) remains unchanged, and the annual dividend forecast is planned to increase from ¥40 in the prior fiscal year to ¥48.

Key Products

Growth Drivers

• Continued recovery in dining-out demand driven by expanding inbound tourism demand and resilient personal consumption
• Competitive advantage in low fixed costs, low break-even structure, and store opening speed enabled by the 10-tsubo small box model
• Asset-light store network expansion through multiple formats including franchising
• Expansion of brand awareness and strengthened talent recruitment through participation in events such as the "FREEDOM NAGOYA" music festival
• Maintaining QSC (Quality, Service, Cleanliness) standards and customer satisfaction through store-devised original events and limited-time menu offerings
• Efficiency improvements in cost and quality control through centralized ingredient management via the central kitchen

Risks

• Risk of rising cost ratio due to sustained high raw material and energy prices (cost of sales ratio rose from 26.5% in the prior interim period to 27.0% in the current interim period)
• Risk of pressure on selling, general and administrative expenses due to worsening labor shortages and continued wage increases and rising recruitment costs
• Increasing difficulty in securing new store locations amid intensifying competition for small box properties
• Risk of food safety incidents such as food poisoning or foreign object contamination (dependence on centralized management via the central kitchen)
• Risk of deteriorating consumer sentiment due to prolonged geopolitical risk and continued price inflation
• Risk of increased financial burden due to a rise in long-term borrowings (long-term borrowings under fixed liabilities increased from ¥624 million to ¥708 million)