HOTMAN Co.,Ltd.

Business Details

The Company's principal business, conducting sales, fitting, vehicle inspection, and maintenance of car accessories under a franchise agreement with Yellow Hat Co., Ltd. The business is centered on the Tohoku region (Fukushima, Miyagi, and Iwate), with additional expansion into Nagano, Ibaraki, and Tochigi, operating 90 stores as of the end of FY2026 (ending March 2026). Sales of ¥17,340 million account for approximately 77% of consolidated sales of ¥22,501 million. Since seasonal products such as studless tires are concentrated in the third quarter (October–December), business performance is significantly affected by weather and snowfall, giving the segment strong seasonality.

Recent Overview

Sales increased, but rising procurement prices caused operating income to fall sharply by 13.7% year on year.

In the Yellow Hat segment for FY2026 (ending March 2026), sales increased to ¥17,340 million (up 2.5% year on year), securing revenue growth. This was driven by strong sales of studless tires and stabilized store visitor traffic due to increased web work reservations. On the other hand, cost of sales rose due especially to higher tire purchase prices, and although strong vehicle inspection and service sales kept gross profit roughly flat, segment operating income fell sharply to ¥849 million (down 13.7% year on year) due to increases in various expenses. In March 2026, the Company relocated and opened the 'Yellow Hat Chikusei Shimodate Store' in Chikusei City, Ibaraki Prefecture.

Key Products

Growth Drivers

• Recovery in seasonal demand for studless and summer tires (strong sales driven by normal-level snowfall and temperatures)
• Stabilization of store visitor traffic and securing of repeat customers through promotion of web work reservations and app membership
• Expansion of high-margin labor income (service sales) through the promotion of vehicle inspection-designated facility status
• Improvement of gross margin through strengthening of seasonal services such as summer 'air conditioner gas cleaning' (FY2027 plan: gross margin to increase by approximately 1 point to 45.6%)
• Expansion of tire sales through face-to-face customer service and cross-selling of products linked to vehicle inspection and maintenance
• Synergy effects from a multi-format store opening strategy (promoting use of other business formats while customers' cars are being serviced)

Risks

• Increased cost of sales and profit pressure due to rising procurement prices for tires and other items (the main factor behind the 13.7% decline in FY2026, ending March 2026, operating income)
• Weather dependency of studless tire sales (risk of declining seasonal product demand due to a mild winter or low snowfall)
• Impact on average spending per customer and visit frequency due to heightened consumer thrift consciousness amid prolonged inflation
• Elevated SG&A expenses due to continued increases in various costs, including labor costs and electricity charges
• Difficulty securing human resources such as automobile mechanics amid the ongoing decline in birthrate and aging population in regional areas