KUSURI NO AOKI HOLDINGS CO.,LTD.

Kusuri no Aoki Holdings Co., Ltd. is a holding company established in 1985 (its predecessor was a drug wholesaler founded in 1869) that operates a Neighborhood Retail Business (Single Segment) centered on drugstores handling pharmaceuticals, cosmetics, daily necessities, food, and dispensing pharmacy services. Its core subsidiary, Kusuri no Aoki Co., Ltd., holds the top market share across five prefectures in the Hokushinetsu region and is actively expanding its store network into the Tohoku, Kanto, Tokai, Kansai, and Shikoku areas. As of the end of FY2025 (ended May 2025), the company operated a total of 1,036 stores, consisting of 1,004 drugstores (of which 664 include an attached dispensing pharmacy), 6 dedicated dispensing pharmacies, and 26 supermarkets. Through strengthening its food division—including fresh food offerings—and acquiring and integrating supermarket operations via M&A, the company is accelerating its transition toward a one-stop food-and-drug shopping format. Its primary customers are local residents, and it has built a community-oriented business model that addresses everyday health, beauty, and dietary needs in a single location.

The company stocks products across five divisions—Health, Beauty, Life, Food, and Pharmacy Dispensing—capturing local residents' daily needs through store formats ranging from 150 to 500 tsubo. The Food Division (51.3% of sales composition) is the largest revenue source, while the Pharmacy Dispensing Division (10.3%) provides stable earnings by capturing outpatient prescriptions. The business structure combines scale expansion through new store openings and M&A with existing store renovations (rolling out fresh food across all stores) to improve visit frequency and customer spend per transaction. Joint product development and joint procurement through business and capital alliances with Tsuruha and Aeon also support profitability.

Revenue rose for five consecutive fiscal periods from ¥328,335 million in FY2022 (ending May 2022) to ¥566,865 million in FY2026 (ending May 2026), setting a new record each time (CAGR of approximately 14.6% over the five-year period). Operating profit, however, after achieving a substantial 43.3% increase in FY2025 (ending May 2025), grew only 1.9% to ¥27,096 million in FY2026 (ending May 2026), with the operating margin declining from 5.3% to 4.8%. In addition to gross margin pressure from an expanding sales mix of Food and fresh food items (totaling 53.2% of sales composition), an increase in SG&A expenses (¥122,400 million, up 15.1% year on year) associated with 111 new store openings weighed on profit growth. Net income attributable to owners of the parent declined to ¥17,133 million (down 3.7% year on year). External factors such as price inflation, rising labor costs, and elevated energy costs have persisted, continuing to exert downward pressure on profitability.