SAPPORO HOLDINGS LIMITED

Business Details

Starting FY2026, reportable segments have been reorganized into two categories: "Domestic Business" (domestic alcoholic beverages, restaurants, and domestic food & beverages) and "Overseas Business" (overseas alcoholic beverages and overseas beverages). Domestically, Sapporo Breweries Ltd. manufactures and sells beer, RTD, and other products, while Sapporo Lion Ltd. operates restaurant businesses. Overseas, SLEEMAN BREWERIES, STONE BREWING CO., SAPPORO VIETNAM and others manufacture and sell beer in the North American and Asian markets.

Recent Overview

Domestic revenue declined but business profit improved; overseas losses narrowed on solid SAPPORO brand performance

In Q1 FY2026 (ending December 2026), the Domestic Business saw revenue decline 7.8% year-on-year due to the rebound effect from last April's price revision-driven March demand pull-forward and the impact of structural reforms including the divestiture of the domestic food & beverage business, but business profit rose 42.4% year-on-year due to structural reform benefits. The Overseas Business saw revenue increase 7.0% year-on-year driven by solid SAPPORO brand performance in North America and Asia (North America +13%, Asia +38%), with the business loss narrowing from ¥1,300 million in the prior-year period to ¥400 million. As a subsequent event, on April 21, 2026, the company resolved to transfer Stone's Stone brand intellectual property and hospitality assets to Firestone Walker and others. While a gain on transfer of approximately $23 million is expected to be recognized in Q2, impairment losses and other charges of approximately $80 million are expected to be recognized related to manufacturing equipment at the ESCO facility (Western US).

Key Products

Growth Drivers

• Solid sales growth of SAPPORO brand beer in North America and Asia markets (North America 113% of prior-year period, Asia 138% of prior-year period)
• Improvement in domestic business profit from structural reforms including the divestiture of domestic food & beverage business (up 42.4% year-on-year)
• Accelerated growth in domestic alcoholic beverages through strengthened beer and RTD initiatives ahead of the October 2026 liquor tax revision
• Achievement of 102% year-on-year existing-store sales in the restaurant business (inbound tourism response, senior customer acquisition, menu revisions)
• Improved production efficiency and reduced fixed costs in the US business through Stone's transfer of Stone brand assets and consolidation of ESCO facility operations
• Improved supply system and sales recovery in overseas beverages (Singapore) following normalization of Malaysia plant operations (110% of prior-year period on a local currency basis)

Risks

• Demand decline in the domestic beer market due to the rebound effect following last year's April price revision and worsening economic sentiment (total beer-type demand at 83% of prior-year period)
• Continued weakness in the North American craft beer market causing overseas brand (Sleeman, Stone) sales volume to remain soft at 92.9% of prior-year period
• Expected recognition of impairment losses and other charges of approximately $80 million in Q2 associated with the shutdown of Stone's ESCO facility (Western US)
• Uncertainty in the business environment outlook including raw material and energy prices (geopolitical risk, prolonged Middle East situation)
• Decline in exports to the Middle East (overseas beverage export business sales fell to 42% of prior-year period on a local currency basis)
• Foreign exchange risk (US dollar, Canadian dollar, Singapore dollar, etc.) affecting overseas business performance
• Upward pressure on sales promotion expenses due to strengthened beer initiatives ahead of the October 2026 liquor tax revision