Karula Co.,LTD.

Business Details

Guided by the philosophy of "providing safe, secure, and healthy delicious meals at more valuable prices," the company operates its core format, the Japanese-style restaurant "Marumatsu," alongside crab cuisine restaurant "Kani Masamune," tonkatsu (pork cutlet) restaurant "Katsu Gourmet," and Japanese soba restaurant "Marumatsu (soba)." It operates stores across the six Tohoku prefectures and Tochigi Prefecture, achieving quality standardization and cost control through in-house factory food processing and a centralized delivery system via a distribution center. The company also utilizes direct-from-producer delivery of hydroponically cultivated agricultural products from its subsidiary, Watari Farm.

Recent Overview

Sales and operating income increased, but net income fell 79.8% year on year due to an ¥81 million extraordinary loss from director retirement benefits

In the first quarter of FY2027 (ending February 2027) (March to May 2026), net sales came to ¥1,959 million (up 5.6% year on year), operating income was ¥94 million (up 3.4%), and ordinary income was ¥98 million (up 10.3%), securing increased income at both the operating and ordinary income levels. However, due to the recognition of ¥81 million in retirement benefits for directors as an extraordinary loss, quarterly net income before income taxes and other adjustments came to only ¥24 million, and quarterly net income attributable to owners of the parent fell sharply to ¥16 million (down 79.8% year on year). There has been no change to the full-year earnings forecast, with the company maintaining its projections of ¥7,700 million in net sales and ¥289 million in operating income for the full year.

Key Products

Growth Drivers

• Strengthening the reservation system through a dedicated department in response to growing inbound demand, and promoting repeat use through partnerships with travel-related businesses
• Continued sales promotion initiatives utilizing social media (Instagram, X, LINE) as well as web flyers and door-to-door leaflet distribution
• Enhancing brand value through collaborative menu items using high-quality ingredients (such as beef tongue and Sangen pork)
• Improving store operation efficiency and eliminating individual-dependent work practices through the sequential introduction of mobile ordering and standardized work procedures
• Increasing sales through active use of regional gift certificates and digital regional currencies (such as Miyagi Points) issued by local governments
• Improving organization-wide productivity and reducing store-level burden through smoother information sharing and stronger training systems

Risks

• Risk of rising cost ratio due to further increases in raw material costs, centered on rice prices (cost of sales ratio: 30.8% in the current Q1, versus 30.7% in the prior-year Q1)
• Continued increases in labor costs and recruitment expenses amid a severe labor shortage (SG&A expenses rose 5.7% year on year to ¥1,262 million)
• Sustained high energy prices stemming from geopolitical risks (such as the situation in the Middle East)
• Downward pressure on customer counts and average spending per customer due to growing consumer thrift and defensive spending attitudes
• Rising costs of imported ingredients and energy due to the continuing weak yen trend
• Intensifying competition with other restaurant operators, delivery businesses, and prepared-food (deli/convenience store) operators
• Risk that cost increases cannot be fully absorbed by sales growth, given the full-year operating income forecast of a 5.6% year-on-year decline (¥289 million)
• Declining trend in the equity ratio (from 40.3% to 38.8%) and continued high level of interest-bearing debt (total long-term borrowings of ¥2,326 million)