SHINOZAKIYA,INC.

Business Details

The core segment of the manufacturing-retail (tofu-version SPA) model, which plans, develops, and sells tofu, soy milk, and other soybean-processed foods. It sells directly to consumers through 30 directly managed stores under the "Sandaime Mozo" (Third-Generation Mozo) brand. Under the concept of "better products at lower prices," the segment is pursuing the development and enhancement of health-themed "Mozo Original Products," pursuing a strategy that combines raising customer spend per visit with acquiring new customers. This is the main business, accounting for approximately 90% of consolidated net sales.

Recent Overview

Net sales up 10.1% and margins improved; H1 remained solid with customer counts also recovering

In H1 FY2026 (ending March 2026) (October 2025 to March 2026), Retail Business net sales were ¥1,498 million (up 10.1% year on year), and segment profit was ¥134 million (up 3.6% year on year). The average customer count per store turned to recovery at 102.6% year on year, and the customer item count also improved to 101.6% year on year. The gross profit margin improved due to the review of product specifications. The impairment loss related to unprofitable stores shrank significantly to ¥611 thousand from ¥7,717 thousand in the prior-year period. The number of directly managed stores remained unchanged at 30.

Key Products

Growth Drivers

• Countermeasures against customer attrition and improvement in gross profit margin through the development of new products at accessible price points and review of existing product specifications
• Increased visit frequency among highly motivated customer segments through "morning markets" and substantial revisions to in-store product offerings (average customer count per store: 102.6% year on year)
• Improved productivity per store through thorough information sharing with sales staff via remote meetings
• Sales expansion through event sales at well-located venues such as Kokubunji Marui and Keio Seiseki Sakuragaoka
• Enhanced brand strength and expansion of high-value-added products through continued strengthening of health-themed "Mozo Original Products"

Risks

• Increased labor costs due to rises in the minimum wage (salaries and allowances of ¥49 million and miscellaneous wages of ¥138 million included in SG&A for the current interim period both increased year on year)
• Risk of rising purchase prices due to soaring raw material costs
• Significant impact on results from external factors such as weather, making it difficult to disclose full-year earnings forecasts
• Risk of recording impairment losses related to unprofitable stores (although reduced to ¥611 thousand in the current interim period, continued monitoring is necessary)
• Maintaining and securing customer counts amid rising prices (responding to customer attrition from price increases remains an ongoing challenge)

Business Details

This segment consists of three businesses: wholesale and sales guidance to franchise stores under the "Sandaime Mozo" brand, wholesale to commercial customers, and mail order. It functions as a channel that complements the directly managed retail business, and had 387 franchise stores as of the end of H1 FY2026 (ending March 2026). Net sales account for approximately 9.6% of consolidated net sales.

Recent Overview

Net sales down 2.8% year on year, but profit rose slightly, maintaining profitability

In H1 FY2026 (ending March 2026) (October 2025 to March 2026), net sales of Other Businesses were ¥159 million (down 2.8% year on year), and segment profit was ¥10 million (up 0.3% year on year). The number of franchise stores continued its declining trend, decreasing by a net 2 stores (10 openings and 12 closures) from 389 to 387 stores. While sales declined, profit remained nearly flat, confirming the resilience of profitability.

Key Products

Growth Drivers

• Compensating for the decline in existing franchise stores by securing new business with operators of large-scale facilities
• A policy of actively developing new franchise stores based on established store-opening criteria
• Sales expansion measures in the mail order business through increasing the number of products handled and offering set products
• Boosting demand for franchise stores as brand recognition of "Sandaime Mozo" increases

Risks

• Structural shrinkage risk to wholesale sales due to the net decrease trend in franchise stores (389 stores at the end of FY2025 (ended September 2025) to 387 stores at the end of H1 FY2026 (ending March 2026))
• Sluggish sales in the mail order business and intensifying competition with rival e-commerce platforms
• Risk that rising raw material costs will squeeze wholesale margins due to increased procurement costs
• Risk that rising costs, such as minimum wage increases, will pressure franchise store operations and lead to franchise attrition
• Impact on results from external factors such as weather (a main reason why disclosure of earnings forecasts is difficult)