HAGOROMO FOODS CORPORATION

Business Details

The Group consists of a single segment comprising the food business and its ancillary operations. Centered on the flagship "Sea Chicken" brand, the Group manufactures and sells canned goods, retort pouch foods, pasta, packaged cooked rice, dried bonito flakes, nori, furikake, pet food, and other products. Sales are primarily distributed to mass retailers via wholesalers. The company employs an asset-light production system that outsources manufacturing to affiliated factories in Japan and overseas.

Recent Overview

Household food led an increase in both revenue and profit, while net assets expanded significantly due to valuation gains on investment securities

In FY2026 (ending March 2026), net sales were ¥75,078 million (up 0.6% year on year) and operating income was ¥3,146 million (up 10.4% year on year). Household food increased (¥60,817 million, up 2.1% year on year) due to growth in Sea Chicken pouch-type products and the establishment of new pricing, while commercial-use food remained weak at ¥11,825 million (down 6.5% year on year). SG\u0026A expenses decreased by ¥125 million due to a ¥232 million reduction in sales incentives and other factors, improving the operating margin from 3.8% to 4.2%. An increase in dividends received (¥450 million, up ¥105 million year on year) also contributed to a 9.2% increase in ordinary income. Valuation difference on available-for-sale securities increased by ¥5,660 million, expanding net assets to ¥49,664 million. As a subsequent event, the tender offer for shares of ITOCHU-SHOKUHIN Corporation was completed, and a gain on sale of investment securities of ¥1,059 million is expected to be recorded as extraordinary income in FY2027 (ending March 2027). For FY2027 (ending March 2027), operating income is projected at ¥2,800 million (down 11.0% year on year) due to increased depreciation expenses resulting from higher capital expenditure.

Key Products

Growth Drivers

• Expanded rollout of pouch-type products across all categories (addressing demand for individual portions and convenience)
• Demand stimulation and brand value enhancement for the Sea Chicken brand through TV commercials and video streaming campaigns (under the theme "Make Today Delicious with Sea Chicken")
• Sales growth of high-value-added products such as furikake and dried bonito flakes (Tenka Mutenka, Nori Benkei)
• Improved gross margin through the establishment of price revisions (cost of sales ratio down 0.1 percentage point)
• Boost to ordinary income from increased dividends received (up ¥105 million year on year)
• Strengthened production capacity through active capital and human capital investment (capital expenditure of ¥3,651 million) under the medium-term management plan "Challenge \u0026 Change for 100th!"
• Growing demand for long-shelf-life processed foods driven by health consciousness and disaster preparedness needs

Risks

• Risk of raw material price increases due to fluctuations in catch volumes of tuna, bonito, and other marine/agricultural products and rising global demand
• Impact of exchange rate fluctuations on the cost of imported raw materials
• Risk of declining sales volume due to intensified consumer thrift and purchase restraint amid rising prices
• Risk of continued weak demand in commercial-use food (convenience stores, institutional catering)
• Risk of rising labor and logistics costs due to labor shortages in manufacturing and logistics operations
• Risk of increased manufacturing costs due to changes in tariff policies of relevant countries
• Risk of rising costs for packaging materials and energy due to crude oil price increases stemming from Middle East tensions
• Risk of profit pressure from increased depreciation expenses associated with higher capital expenditure (FY2027, ending March 2027)