ENVALITH
株式会社フライングガーデン logo

FLYING GARDEN CO., LTD.

3317・Standard Market・Retail Trade

Official website
株式会社フライングガーデン logo
FLYING GARDEN CO., LTD.3317

Business

Flying Garden Co., Ltd. is a restaurant company that opened its first suburban-style restaurant in Kiryu City, Gunma Prefecture in 1984, and currently operates 59 directly-managed restaurants under the "Flying Garden" brand across five Kanto prefectures: Tochigi, Gunma, Saitama, Ibaraki, and Chiba. Its flagship product is the "Bakudan Hamburg," manufactured at its own Tochigi factory, offering a value-focused dining experience combined with 100% Domestic Rice, Free Refills. Its main customer base consists of families using suburban roadside locations, and it maintains a product-concentrated business model in which Bakudan Hamburg accounts for over 60% of customer visits. The company listed on the TSE Standard Market (formerly JASDAQ) in 2004, and net sales reached ¥9,200 million in FY2026 (ending March 2026).

Business Model

The company manufactures hamburg steaks and chicken in-house at its Tochigi Plant and supplies them to all directly-operated stores, adopting a vertically integrated model that achieves both quality uniformity and cost control. All revenue is generated through direct sales at stores, with no franchise income or similar sources. With numerical targets of an average customer spend of ¥1,680 or more and customer traffic of 100% or more year-on-year, the structure builds up net sales by combining stronger customer acquisition through Limited-Time Menus and collaboration campaigns with store network expansion through new store openings.

Company Strengths

Bakudan Hamburg and chicken have been manufactured in-house at the Tochigi Plant, completed in 2012, with sales rolled out to all stores starting in 2013. In FY2026 (ending March 2026), plant production on a manufacturing cost basis reached ¥1,130 million (¥965 million for hamburg, ¥164 million for chicken), establishing a vertically integrated system that ensures uniform quality and stable supply and is difficult for competitors to replicate in a short period.

Bakudan Hamburg has a target KPI of accounting for 60% or more of customer visits, and customer traffic is sustained through continuous rollout of items such as the anniversary "Super Large Bakudan Hamburg" and Limited-Time Menu collaborations (with VTubers, anime, Utsunomiya Brex, etc.). The sense of value created by combining this with 100% Domestic Rice, Free Refills functions as a key differentiator from competitors.

At the end of FY2026 (ending March 2026), net assets stood at ¥3,670 million against total assets of ¥5,405 million, resulting in an equity ratio of approximately 67.9%. The company's stated funding policy is to "utilize minimal bank borrowing while taking into account profits and internal reserves," and it maintains a self-funded financial structure in which operating cash flow of ¥724 million exceeds capital expenditure of ¥588 million.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved increased revenue and profit with net sales of ¥9,200 million (+11.3%), operating income of ¥599 million (+7.3%), and net income attributable to owners of parent of ¥455 million (+29.1%). However, the large increase in net income was mainly driven by an improvement in income tax adjustment (¥-30 million), which lowered the effective tax rate, while the improvement in core business profitability was limited. For FY2027 (ending March 2027), the company forecasts a significant decline in profit, with operating income of ¥560 million (down 6.6% year on year) and net income of ¥350 million (down 23.0% year on year), reflecting an outlook in which continued cost pressures will squeeze earnings.

External factors such as soaring prices of raw materials including rice, rising labor costs due to chronic labor shortages, and increasing construction costs continue to create a harsh operating environment for the restaurant industry as a whole. In FY2026 (ending March 2026), selling, general and administrative expenses rose 7.6% year on year to ¥5,413 million, absorbing the increase in gross profit. The operating margin declined slightly to 6.5% (from 6.8% in the prior period), reflecting an ongoing pattern in which cost increases are not being fully offset by pricing power or customer traffic.

In FY2026 (ending March 2026), the opening of the 'Maebashi Kawara store' and the closure of the 'Kawagoe Saitama Idai-mae store' left the store count essentially flat at 59 stores. Achieving the mid- to long-term target of ¥10 billion in net sales and a 6% ordinary income margin requires continuous net store openings, but soaring construction costs pose a risk of worsening profitability for new store openings. In addition, the store network remains concentrated in the Kita-Kanto region, leaving vulnerability to regional economic fluctuations and intensifying competition. The FY2027 (ending March 2027) forecast of net sales of ¥9,600 million (+4.3%) appears to be driven mainly by existing-store growth, and concrete progress in accelerating new store openings will be a key focus.

Growth Strategy

Aiming for net sales of ¥10 billion and an ordinary profit margin of 6% through new store openings, enhanced product appeal, and cost review

In FY2026 (ending March 2026), the company opened the Maebashi Kawahara store, but the closure of the Kawagoe Saitama Idai-mae store left the store count at fiscal year-end effectively flat at 59 stores. With rising construction costs pushing up the cost of opening new stores, accelerating the pace of net store additions is a prerequisite for achieving the ¥10 billion sales target.

In addition to the continued rollout of Limited-Time Menu items (shaved ice, strawberry desserts, extra-large Bakudan Hamburg, etc.), the company newly implemented collaboration campaigns with VTubers and anime works. This has contributed to steady trends in customer traffic and sales by simultaneously expanding reach to new customer segments and promoting repeat visits among existing customers.

Utility costs (¥437 million, down 1.1% year on year) turned to a decrease compared to the previous period, but labor costs, raw material costs, and repair expenses, among others, are trending upward. While the FY2027 (ending March 2027) forecast calls for further cost review, recovery in the operating profit margin will not be easy amid continued cost pressures, and the effectiveness of concrete measures is being called into question.

Last updated: July 19, 2026