create restaurants holdings inc.

Business Details

Comprises four categories: CR Category (commercial facilities and contract dining), Izakaya Category (formerly SFP Category), Specialty Brand Category, and Overseas Category. Operates over 1,100 stores domestically and internationally, advancing brand expansion through M&A and enhancement of existing store value in parallel, centered on a "multi-brand, multi-location strategy" and "group federal management." IFRS applied. In the first quarter of FY2027 (ending February 2027), both revenue and operating profit exceeded the same period of the prior year, achieving increased revenue and profit.

Recent Overview

Achieved increased revenue and profit in Q1; accelerated M&A activity including completion of SFP merger and new US business acquisition

In the first quarter of FY2027 (ending February 2027) (March to May 2026), revenue increased to ¥43,277 million (up 3.5% year-on-year) and operating profit increased to ¥3,378 million (up 10.8% year-on-year), achieving increased revenue and profit. Existing store sales year-on-year were 102.8%, remaining generally steady. While the CR Category drove substantial profit growth, the Izakaya Category saw a profit decline as existing stores, particularly "Isomaru Suisan," fell below the prior-year level. As a subsequent event, the absorption-type merger with SFP Holdings was completed effective July 1, 2026. M&A activity has accelerated, including the business transfer acquisition of 6 stores of the "Hazelwood Food + Drink" brand in Minnesota, USA (completed on the same July 1), and the decision to acquire all shares of Innocence Co., Ltd., which operates 10 ramen specialty stores in Tokyo (scheduled to join the group in September). The full-year earnings forecast remains unchanged from the previous disclosure.

Key Products

Growth Drivers

• Existing store sales year-on-year of 102.8%, indicating generally steady existing store performance (bakery and noodle formats maintained strong performance)
• RON Co., Ltd. (Western-style dining formats such as "Grill RON") joining the group and strengthening of dominance in the Kansai area
• Expansion of the North American business platform through the business transfer acquisition of 6 "Hazelwood Food + Drink" stores in the US (completed July 2026)
• Decision to acquire all shares of Innocence Co., Ltd. (10 ramen specialty stores in Tokyo) (scheduled to join the group in September 2026)
• Optimized allocation of management resources, faster decision-making, and cost efficiency gains from completion of the absorption-type merger with SFP Holdings (July 1, 2026)
• Continued expansion of demand for special occasions and inbound demand at stores in urban commercial facilities
• Turnaround of the Izakaya Category through strengthened customer acquisition using the "Isomaru Suisan" app and conversion to casual tavern formats, among other measures

Risks

• Delayed recovery in customer traffic and structural decline in alcohol consumption in the Izakaya Category (continued existing-store shortfalls versus the prior year, particularly at "Isomaru Suisan")
• Cost pressure from structurally elevated raw material prices and labor costs (adjusted EBITDA margin declined 0.3 points year-on-year)
• Tightening of consumer spending choices and sluggish overall customer traffic growth due to the entrenchment of selective ("meri-hari") spending amid rising prices
• Integration and operational risks, and earnings volatility risk, in the North American business (Il Fornaio, Wildflower, and the newly acquired Hazelwood)
• Worsening labor shortages and continued increases in recruitment and labor costs
• Uncertainty in the global economy and resource price volatility stemming from the prolonged and increasingly complex geopolitical risks overseas
• Increase in goodwill and intangible assets and associated impairment risk due to accelerated M&A activity (goodwill balance of ¥26,211 million)