ENVALITH
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Kyokuto Co., Ltd.

2300・Standard Market・Services

Official website
株式会社きょくとう logo
Kyokuto Co., Ltd.2300

Business

Kyokuto Co., Ltd. is a home cleaning specialist founded in 1964 in Fukuoka City. With dry cleaning and laundry as its core services, the company is based in Kyushu (Fukuoka and Saga) and has expanded into the Chugoku, Kansai, and Kanto regions. As of the end of February 2025, it operated 488 stores (directly-operated, quasi-directly-operated, and agency), mainly under its two brands, "Pelicans" and "Coins". Its regionally-focused business model combines customer retention through a special membership program with value-added services such as stain removal, water-repellent treatment, and down comforter refurbishment. The company is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The company builds its store network through three formats—directly operated, quasi-directly operated, and agency stores—paying commissions to contracted operators based on sales, thereby containing fixed costs. Under the "Pelican's" brand, special members (annual fee-based) receive fee discounts and service tickets, improving visit frequency and customer loyalty. "Coin's" pursues a price-appeal strategy to capture a broad customer base. Revenue composition is centered on Dry Cleaning (approximately 75%) and Laundry (approximately 25%), supplemented by other merchandise sales such as annual membership fees and promotional goods.

Company Strengths

With over 60 years of operating history since its founding in 1964, the company operates 234 stores and 18 of its 41 plants in Fukuoka Prefecture alone. It has expanded from its core base in Kyushu into the Kansai and Kanto regions, maintaining a network of 488 stores and 41 plants as of the end of February 2025. The company has continued to expand its store network through M&A, including the acquisition of business operations (stores in Fukuoka Prefecture) in December 2023 and the acquisition of four stores in Kurume City in May 2025.

Since April 2024, the company has begun operating

The company posted a large loss in FY2022, with operating loss of ¥443 million and net loss of ¥784 million, but returned to profitability in FY2024 through structural reforms and sales expansion, achieving operating profit of ¥83 million and net income of ¥119 million. In FY2025, it maintained profitability with operating profit of ¥96 million and net income of ¥83 million, while operating cash flow improved to a positive ¥393 million.

ENVALITH's Perspective

In Q1 of FY2027 (ending February 2027), net sales came to ¥1,854 million (down 4.3% year on year), operating profit was ¥372 million (down 10.7%), and ordinary profit was ¥383 million (down 13.3%), with all indicators falling below the prior-year level. Full-year results for FY2026 (ending February 2026) were also weak, with net sales of ¥5,244 million (down 2.6% year on year) and operating profit of ¥3 million, marking a second consecutive year of declining revenue. The full-year forecast calls for a recovery to net sales of ¥5,350 million and operating profit of ¥100 million, but the Q1 progress rate stands at 34.7% for net sales and 372% for operating profit (the latter is a reference figure given seasonal skew), meaning that a recovery in demand in the second half will be key to achieving the full-year targets.

In terms of the market environment, rising energy and raw material prices driven by the situation in the Middle East have pushed up fuel and raw material costs, with cost of sales increasing by ¥3,689 thousand year on year (to ¥426,586 thousand). In addition, the increased household burden from rising prices has led consumers to hold back on using cleaning services, weighing on net sales. These external factors are difficult for the company to control on its own, and the company itself discloses that it is "reasonably difficult to estimate" the risk of the Middle East situation becoming prolonged, which warrants close monitoring.

In the current Q1, a provision for doubtful accounts of ¥17,927 thousand was newly recorded as a non-operating expense (versus zero in the same period of the previous year), accounting for approximately 30% of the year-on-year decline in ordinary profit (¥59,051 thousand). On the other hand, a reversal of the provision for retirement benefits for directors of ¥17,760 thousand was recorded as extraordinary income, partially offsetting the impact on profit. Whether these non-recurring items are continuing or one-off in nature is an important point to assess when evaluating the company's underlying earnings power.

Growth Strategy

Rebuilding the profit base through Kurume plant operations, enhanced value-added services, and membership growth

The Kurume plant, acquired in May 2025 as a processing hub for 4 stores in Kurume City, Fukuoka Prefecture, began operations in March 2026. The company aims to reduce costs through operational efficiency and increase sales by expanding market share within Kurume City.

The company is strengthening specialized processing services such as insect-repellent treatment, deluxe finishing, stain removal, water-repellent treatment, and sneaker cleaning, aiming to increase the proportion of higher-priced value-added product sales. Promotional activities aligned with the spring seasonal clothing change have already been implemented.

In the first quarter, the company opened 1 new store and renovated 14 existing stores, while closing 2 unprofitable stores. The total store count at quarter-end was 477. The company continues to promote a transition toward a more profitable store portfolio.

The company aims to increase visit frequency and membership numbers through special membership enrollment promotion campaigns and SNS marketing initiatives. It is enhancing convenience and promoting customer retention by improving the utilization rate of 24-hour pickup robots and expanding app membership.

Last updated: July 17, 2026