SKYLARK HOLDINGS CO., LTD.

Business Details

A restaurant business operating multiple brands both domestically and internationally, including Gusto, Bamiyan, Shabu-yo, Jonathan's, Yumean, and Sukesan Udon. Domestically, the company leverages a vertically integrated infrastructure (central kitchens and proprietary logistics) and has also expanded overseas into Taiwan, Malaysia, and the United States. As of the end of March 2026, the company operated 3,099 stores (including 8 unopened stores in the process of conversion). The reportable segment is a single "Restaurant Business" segment, meaning the consolidated financial figures correspond directly to segment performance.

Recent Overview

Strong start to FY2026 (ending December 2026) with Q1 revenue up 8.6% and quarterly profit up 27.0%

In Q1 FY2026 (ending December 2026) (January to March), existing-store sales remained solid at 106.0% year-on-year. Both customer count and average spend per customer increased, resulting in revenue of ¥121,263 million (up 8.6% year-on-year) and profit attributable to owners of parent for the quarter of ¥5,524 million (up 27.0% year-on-year). Operational reforms through the standardization of Gusto's grand menu, as well as menu and promotion strategies such as expanding low-priced small-plate dishes and collaborating with celebrity chefs and popular IP, contributed to the results. On the other hand, due to rising raw material costs, the gross profit margin declined to 66.4% (down 0.3 points year-on-year), and SG&A expenses rose to ¥71,468 million (up ¥5,204 million year-on-year) due to increased personnel costs (base pay increases and higher temporary bonuses). In the first quarter, the company opened 5 new stores, converted the format of 14 stores, remodeled 50 stores, and closed 17 stores. The full-year earnings forecast (revenue of ¥490,000 million and business profit of ¥36,000 million) remains unchanged.

Key Products

Growth Drivers

• Sustained growth in existing-store sales (106.0% year-on-year in Q1 FY2026, ending December 2026): increase in existing-store sales driven by growth in both customer count and average spend per customer
• Advancing menu and promotion strategies: addressing thrift-conscious demand through expanded low-priced small-plate offerings while also providing experiential value through collaborations with celebrity chefs and popular IP
• Operational reform through deepening of "store-centered management": standardization of Gusto's grand menu has improved cooking proficiency, serving quality, and productivity
• Expansion of delivery operations: improved delivery efficiency through a combination of in-house delivery and use of partner companies
• Continued domestic store openings, format conversions, and remodeling: in Q1 FY2026 (ending December 2026), 5 new store openings, 14 format conversions, and 50 store remodelings were carried out
• Accelerating overseas expansion: expansion of overseas business centered on Taiwan and Malaysia, including the opening of a "Sukiya" store in Malaysia
• Business expansion through M&A: strengthened portfolio through the consolidation of Sukesan Udon (October 2024) and Createries Consultancy (January 2025)

Risks

• Continued cost pressure from elevated raw material costs: gross profit margin declined to 66.4% in Q1 FY2026 (ending December 2026), down 0.3 points year-on-year
• Upward pressure on labor costs: base pay increases and higher temporary bonuses pushed personnel expenses within SG&A to ¥38,459 million in Q1 FY2026 (ending December 2026), up ¥3,263 million year-on-year
• Strengthening consumer thrift orientation and uncertainty in dining-out demand: risk of weaker consumer sentiment due to rising prices
• Goodwill write-off losses associated with store closures: 17 stores closed in Q1 FY2026 (ending December 2026), resulting in a goodwill write-off loss of ¥142 million
• Overseas expansion risks: foreign exchange fluctuations, local regulations, geopolitical risks, etc.
• Persistently high utility costs: utility costs of ¥4,750 million in Q1 FY2026 (ending December 2026), down ¥93 million year-on-year but still elevated