ARATA CORPORATION

Business Details

A single-segment business wholesaling daily necessities, cosmetics, pet supplies, household goods, and other products to retailers such as drugstores, home centers, supermarkets, and discount stores. The company differentiates itself through category strategies leveraging proprietary information analysis capabilities and the expansion of exclusive and priority distribution products. In January 2026, the company made MAP Holdings (msh Co., Ltd. and Polite Co., Ltd.) a wholly owned subsidiary, incorporating cosmetics brands and wholesale functions.

Recent Overview

Net sales exceeded ¥1 trillion for the first time, but operating profit fell 11.9% due to rising SG&A expenses

For the full year of FY2026 (ending March 2026), net sales reached ¥1,004,749 million (up 1.9% year on year), surpassing the ¥1 trillion mark for the first time, though falling short of the target of ¥1,006.0 billion. While the H&B, pet, drugstore, and discount store categories drove growth, SG&A expenses increased 3.6% year on year (SG&A ratio up 0.13 points), weighed down by rising personnel costs, logistics costs, and rent. In January 2026, the company made MAP Holdings (msh Co., Ltd. and Polite Co., Ltd.) a wholly owned subsidiary for ¥6,728 million, recording provisional goodwill of ¥8,631 million. For FY2027 (ending March 2027), the company will launch its new medium-term management plan, "Medium-Term Management Plan 2030," but projects a significant profit decline due to structural strengthening investments and other factors, with operating profit of ¥11,000 million (down 16.7% year on year) and ordinary profit of ¥10,500 million (down 22.4%).

Key Products

Growth Drivers

• Strengthened brand and proposal capabilities in the Health & Beauty category through expansion of exclusive and priority distribution products and consolidation of msh Co., Ltd. (popular brands such as Love Liner)
• New business acquisition and expansion of in-store share through high-value-added product proposals leveraging the specialized expertise of Japelle Co., Ltd. in the pet category
• Expansion of in-store share at drugstores (net sales of ¥522,924 million, up 2.3% year on year) and discount stores (up 6.6%)
• Expansion of "other" format sales to ¥117,195 million (up 7.3% year on year) through new business with convenience stores and other new formats (started October 2024)
• Improvement in average unit price through strategic expansion of large-capacity and high-value-added products
• Strengthened data analysis capabilities and enhanced proposal capabilities through a strategic business alliance with True Data Inc.
• Target under the "Growth Strategy" of the Medium-Term Management Plan 2030 to increase net sales by ¥155.0 billion and ordinary profit by ¥2.5 billion over the four years through FY2030 (ending March 2030)

Risks

• Persistently elevated SG&A ratio due to continued increases in logistics costs and personnel expenses (delayed realization of SG&A cost reduction effects from IT initiatives, and rising logistics and personnel costs amid labor shortages)
• Sluggish sales volume growth and slowing sales growth rate due to strengthened consumer thrift consciousness and price increases
• Decline in gross profit margin due to increases in center fees and other costs stemming from price increases (down 0.07 points year on year in FY2026 (ending March 2026))
• Uncertainty regarding the finalization and integration of goodwill of ¥8,631 million (provisional figure, amortization period undetermined) arising from the MAP Holdings acquisition, and uncertainty regarding realization of synergies
• Sales decline in the GMS format (¥34,593 million in FY2026 (ending March 2026), down 9.2% year on year) and risk of changes in business partners due to retail industry restructuring
• Significant projected profit decline for FY2027 (ending March 2027) due to structural strengthening investments and other factors, with ordinary profit of ¥10,500 million (down 22.4% year on year) and net profit of ¥7,000 million (down 30.9%)
• Risk of rising import product costs due to expanding geopolitical risk and foreign exchange fluctuations