ENVALITH
株式会社ツルハホールディングス logo

TSURUHA HOLDINGS INC.

3391・Prime Market・Retail Trade

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株式会社ツルハホールディングス logo
TSURUHA HOLDINGS INC.3391

Business

Tsuruha Holdings Inc. is a drugstore holding company that traces its origins to its founding in Asahikawa City, Hokkaido, in 1929. Through 11 consolidated subsidiaries, including Tsuruha Co., Ltd., Kusurino Fukutaro Co., Ltd., Redi Yakkyoku Co., Ltd., Kyorindo Group Holdings Co., Ltd., and Drug Eleven Co., Ltd., the company operates Retail Sales Business (Single Segment) centered on pharmaceuticals, cosmetics, sundries, and food. As of the end of February 2025, it operated 2,658 directly managed stores domestically (including 967 stores with attached Dispensing Pharmacy operations), 22 overseas stores (in Thailand), and 7 franchise stores. The company has a broad nationwide presence spanning Hokkaido, Tohoku, Kanto, Chushikoku, and Kyushu, providing community-based healthcare support to its primary customers, general consumers. Following the business integration with Welcia Holdings in December 2025, the company plans to expand to approximately 5,676 directly managed domestic stores.

Business Model

Merchandise sales of pharmaceuticals (23.7% of sales composition), sundries (26.0%), food (25.9%), cosmetics (13.9%), and others form the core of revenue. Tsuruha Group Merchandising Co., Ltd. centrally manages merchandise procurement, logistics, and PB development, creating a structure that enhances group-wide purchasing efficiency and gross margin. Co-located Dispensing Pharmacies (967 stores) also capture prescription revenue. Gross profit margin stands at 30.5%, and after deducting the SG&A ratio of 26.0%, operating margin is approximately 4.5%. Funding is sourced through a combination of internal funds and bank borrowings.

Company Strengths

As of the end of February 2025, the company operated 2,658 directly-managed stores domestically. Stores are distributed nationwide with 437 in Hokkaido, 593 in Tohoku, 528 in Kanto-Koshinetsu, 269 in Chubu-Kansai, 374 in Chugoku, 225 in Shikoku, and 232 in Kyushu-Okinawa, pursuing a dominant strategy while diversifying region-specific dependency risk. The company also has an overseas presence with 22 stores in Thailand.

As of the end of February 2025, 967 of the domestic directly-managed stores had an attached Dispensing Pharmacy. Pharmaceutical sales for the 9.5-month irregular fiscal period totaled ¥200,746 million (23.7% of composition). Increases in the number of prescriptions from newly opened Dispensing Pharmacy locations have supported sales in the pharmaceutical segment, forming a stable demand base amid an aging society.

Tsuruha Group Merchandising Co., Ltd. is responsible for the planning, development, and sales promotion of the Private Brand (PB) Products "Kurashi Rhythm" and "Kurashi Rhythm MEDICAL." Even during the 9.5-month irregular fiscal period, gross profit margin was maintained and improved at 30.5% (versus 30.4% for the previous 12-month period). The company aims to differentiate itself from competitors and improve gross margin through joint development with major manufacturers and the expansion of food PB products.

ENVALITH's Perspective

Sales for Q1 FY2027 (ending Feb 2027) (March–May 2026) reached ¥636,886 million, up 133.7% year-on-year. However, the operating margin remained subdued at 3.8% (¥24,229 million), weighed down by the increase in SG&A expenses associated with the integration (¥167,506 million, up 139.5% year-on-year). Quarterly EPS fell sharply to ¥29.75 from ¥45.66 in the same period last year, and it warrants close attention that the expansion in scale has not immediately translated into shareholder returns.

At the end of Q1 FY2027 (ending Feb 2027), the goodwill balance stood at ¥448,420 million, accounting for 26.6% of total assets of ¥1,688,387 million. Quarterly goodwill amortization surged to ¥6,173 million (versus ¥705 million in the same period last year), and the risk of impairment remains significant should integration effects fall short of expectations. On the other hand, the equity ratio was maintained at a sound 51.9%, and long-term borrowings stood at a manageable ¥119,526 million.

Against full-year guidance (sales of ¥2,555,000 million, operating profit of ¥99,400 million), the Q1 progress rate stood at 24.9% for sales and 24.4% for operating profit, broadly in line with plan. However, full-year net income attributable to owners of the parent is forecast at ¥41,500 million, down 2.7% year-on-year, reflecting the ongoing structure in which integration costs and goodwill amortization burdens continue to constrain profit growth. The policy of pursuing profitability improvement while closing unprofitable stores (47 stores closed in Q1, with a net decrease of 11 stores) is commendable.

Growth Strategy

Building the largest healthcare chain in the industry through the realization of integration synergies, expansion of dispensing pharmacy operations, strengthening of PB products, and system integration

The business integration was completed on December 1, 2025. Under the medium-term management plan (FY2027–FY2029, ending February 2027 to February 2029), the company is advancing the "establishment of a value-creation platform." It is progressing with the organizational integration of merchandising departments, mutual introduction of PB products, and optimal store openings under a nationwide six-block system, aiming for the phased realization of integration synergies.

Building on a base of 3,324 stores handling dispensing pharmacy services (as of the end of May 2026), the company aims to capture prescription demand associated with an aging population. Against the backdrop of industry-wide efforts by various companies to expand dispensing pharmacy co-location, industry-wide dispensing pharmacy sales are on an upward trend, and the company plans to continue promoting dispensing pharmacy co-location.

The company is rolling out a Drug & Food model with an expanded food category in areas where demand is expected. Aiming to increase visit frequency and expand trade areas, it is also actively conducting renovations to strengthen the competitiveness of existing stores.

A new Private Brand (PB) Products line combining the strengths of both Tsuruha and Welcia has been developed, along with mutual introduction of existing PB Products. The company is advancing the organizational integration of its merchandising departments with a view to unifying merchandising, aiming to improve gross margin.

The company is developing its organizational structure with a view to core system integration, and is working on building data infrastructure including core systems and customer management. The aim is to improve customer convenience and operational efficiency across the group.

In the first quarter of FY2027 (ending February 2027), the company opened 36 new stores and closed 47 stores, resulting in a net decrease of 11 stores. The company plans to continue reviewing unprofitable stores while promoting quality-focused store development to improve profitability.

Last updated: July 17, 2026