NAFCO Co., Ltd.

Business Details

This segment handles carpentry tools, construction hardware, paint, plastering supplies, gardening supplies, plumbing supplies, exterior products, lumber & shelving, room accessories, work supplies, greenery, electrical materials, and agricultural materials. It targets a broad customer base ranging from general consumers to professional contractors, and is the largest segment, accounting for approximately 46% of consolidated net sales. The primary sales channel is large-format suburban stores operating across 34 prefectures, mainly in the Kyushu and Chugoku regions. From the beginning of the fiscal year under review, the company revised its merchandise management structure, reclassifying some products into the "Household Supplies" segment.

Recent Overview

Although the rebound decline in disaster prevention supplies weighed on results, rice-related and summer products grew, raising the segment's sales share.

Net sales for the full year of FY2026 (ending March 2026) were ¥80,569 million (down 1.8% year on year), and segment profit was ¥28,695 million (down 2.6% year on year). The main factor weighing on results was the rebound decline in demand for disaster prevention supplies following the Hyuganada Sea earthquake and Typhoon No. 10 in the prior fiscal year. On the other hand, this was partially offset by significant growth in brown rice cold storage units and rice harvesting supplies amid rice shortages, as well as solid performance of summer apparel and watering supplies due to extreme heat. The segment's share of consolidated net sales rose from 45.3% to 46.2%, maintaining its position as the largest segment. Note that from the beginning of the fiscal year under review, some products were reclassified into the "Household Supplies" segment, and prior period figures have been retroactively restated based on the revised classification method.

Key Products

Growth Drivers

• Expansion of demand for rice-related supplies such as brown rice cold storage units and rice harvesting supplies amid rice shortages
• Strong performance of watering supplies and summer-related products due to extreme heat and prolonged hot weather
• Medium- to long-term demand for disaster prevention and crime prevention-related products amid heightened awareness (earthquakes, typhoons, security concerns)
• Improved markup rates through expansion of the private brand product ratio
• Profit margin improvement measures through increased number of imported product items and transaction volume
• Reduction in logistics and delivery costs through revised operations at distribution centers and store deliveries

Risks

• Risk of rebound decline in demand for disaster prevention supplies following natural disasters (earthquake, typhoon) in the prior fiscal year (materialized in the current period)
• Risk of weak sales of gardening-related products (flower and plant seedlings, soil, fertilizer, chemicals) due to unfavorable weather
• Intensifying competition from other industries (drugstores, discount stores, large-scale retailers, etc.)
• Risk of rising procurement costs due to yen depreciation and higher raw material prices
• Risk of consumers holding back on purchases of durable goods and DIY-related products amid growing frugality
• Impact on the continuity of sales comparisons due to changes in product classification segments