cawachi limited

Kawachi Pharmaceutical Co., Ltd. was founded in 1960 and is headquartered in Oyama City, Tochigi Prefecture, operating a suburban drugstore chain. The company defines stores with a sales floor area of 400 tsubo or more as "mega drugstores," offering a wide range of products including pharmaceuticals, cosmetics, sundries, and general food items. Its main trading areas are the Tohoku, Kanto, Koshinetsu, and Tokai regions, with 386 stores (including 160 stores with attached dispensing pharmacies) as of the end of FY2026 (ending March 2026). Its primary customers are local general consumers, and the company leverages the convenience of spacious parking lots and barrier-free design to capture the everyday living needs of a broad range of demographics, including the elderly. Under the concept of "Pharmacy More," the company aims to become the community's "most accessible healthcare center" by integrating diverse product offerings that go beyond pharmaceuticals with dispensing pharmacy functions.

The company operates single-floor stores with a sales floor area of 400 tsubo or more, located in suburban areas along major residential roads, offering pharmaceuticals, cosmetics, sundries, and general food items at low prices to encourage frequent customer visits. By adding dispensing pharmacies to these stores, the company adds stable dispensing revenue from prescription fulfillment, thereby diversifying its earnings. Purchasing is managed by item category, with total purchases for FY2026 (ending March 2026) amounting to ¥219,749 million. Against net sales of ¥284,492 million, operating profit was ¥6,779 million (operating margin of approximately 2.4%), reflecting a high-volume, low-margin earnings structure.

Revenue followed a gradual growth trend from ¥279,462 million in FY2022 to ¥287,816 million in FY2025, but turned to a 1.2% year-on-year decline in FY2026, reaching ¥284,492 million. By segment, pharmaceuticals (¥51,418 million, down 1.5% year-on-year) and general merchandise (¥77,413 million, down 2.5% year-on-year) declined, while only cosmetics (¥23,279 million, up 0.3% year-on-year) posted a slight increase. External factors, including heightened frugality amid price increases and expanded store openings by competitors, weighed on sales. Operating profit was ¥6,779 million (down 9.1% year-on-year), and ordinary profit was ¥7,897 million (down 5.3% year-on-year). The company recorded extraordinary losses including an impairment loss of ¥2,117 million (versus ¥861 million in the previous period) and a store closure loss of ¥41 million, causing net profit to fall sharply to ¥3,200 million (down 34.5% year-on-year). For FY2027 (ending March 2027), the company forecasts revenue of ¥285,000 million (up 0.2% year-on-year), operating profit of ¥5,100 million (down 24.8% year-on-year), and net profit of ¥3,000 million (down 6.3% year-on-year), suggesting profit levels will remain depressed.