COSMOS Pharmaceutical Corporation

Business Details

Operates drugstores stocked with daily consumable goods such as Pharmaceuticals, Cosmetics, Sundries, and General Food. Adopts a high-density, small trade area-focused store opening strategy targeting a trade area population of approximately 10,000 people, centered on the "Everyday Low Price" policy and low-cost operations. Expands its store network across six regions—Kanto, Chubu, Kansai, Chugoku, Shikoku, and Kyushu—capturing consumers' thrift-oriented spending. Green Flash Co., Ltd. (a special subsidiary for employing persons with disabilities) handles comprehensive store maintenance operations.

Recent Overview

Cumulative Q3 FY2026 (ending May 2026) sales were ¥810,380 million, up 7.7% year on year, showing steady growth

For the nine-month cumulative period of the third quarter of FY2026 (ending May 2026) (June 1, 2025 to February 28, 2026), the company recorded net sales of ¥810,380 million (up 7.7% year on year), operating profit of ¥32,021 million (up 1.2% year on year), ordinary profit of ¥33,865 million (up 0.3% year on year), and quarterly net income attributable to owners of the parent of ¥22,748 million (up 1.8% year on year). During the period, 57 new stores were opened (14 in Kanto, 13 in Chubu, 11 in Kansai, 2 in Chugoku, 8 in Shikoku, 9 in Kyushu), and 4 stores were closed, bringing the total number of stores at period end to 1,662. General Food expanded to become the largest category, accounting for 63.0% of sales. The Kanto and Chubu regions drove high growth, exceeding 20% year on year. There is no change to the full-year earnings forecast (net sales of ¥1,057,000 million, operating profit of ¥40,500 million).

Key Products

Growth Drivers

• Aggressive new store opening strategy: 120 new stores opened in FY2025 (ending May 2025), with expansion into new trade areas in the Kanto and Chubu regions driving high growth
• Capturing consumers' thrift-oriented spending through the "Everyday Low Price" policy
• Improvement in gross profit margin: achieved 21.1%, up 1.6 percentage points year on year, through procurement cost reduction negotiations and price pass-through amid inflation
• Expansion of the General Food category: accounting for 61.2% of sales composition (up 6.2% year on year for the same quarter), contributing to increased visit frequency and number of items purchased
• Small trade area-type high-density store opening model: continuous multi-store expansion enabled by an abundance of candidate store locations targeting a trade area population of approximately 10,000 people

Risks

• Self-competition risk: the aggressive new store opening policy tolerates temporary declines in profitability, and the impact on existing stores from increased store density continues
• Cost increase risk: rising costs such as labor and utility expenses due to inflation are pushing up selling, general and administrative expenses (up 10.3% year on year)
• Consumption environment risk: declining consumer purchasing power due to price increases in goods and services stemming from domestic and international political instability and yen depreciation
• Intensifying competition risk: progressing oligopolization in the drugstore industry due to mass store openings, mergers, and alliances among leading companies
• Talent acquisition risk: securing and developing store operation management personnel amid accelerating multi-store expansion is explicitly stated as a management challenge