DAIWA CYCLE CO.,LTD.
5888・Growth Market・Retail Trade
Business
DAIWA CYCLE Co., Ltd. is a retail chain that operates large-format bicycle specialty stores mainly along suburban roadsides in the Kansai, Kanto, and Chubu regions, under the corporate philosophy of "creating a new normal for bicycles." Starting from bicycle parking lot management in Yao City, Osaka Prefecture in 1980, the company began chain development of bicycle specialty mass-retail stores in 1999. It listed on the Tokyo Stock Exchange Growth Market in November 2023. In addition to selling bicycles, parts, and accessories, the company provides after-sales services such as on-site repair services and regular inspections, with its core customer base consisting of consumers, primarily families in their 30s and 40s raising children. As of the end of January 2026, the company operates a total of 154 stores, comprising 150 directly-operated stores and 4 franchise stores.
Business Model
Of net sales of ¥21,107 million, Bicycle Sales accounted for 74.1% (¥15,643 million), Parts & Accessories for 14.9% (¥3,155 million), and Maintenance & Repair Services, etc. for 10.9% (¥2,308 million). In addition to NB (national brand) products, the company offers PB (private brand) products manufactured under contract by Chinese makers (33.7% of bicycle sales), securing price competitiveness and profit margins through direct procurement that bypasses trading companies and wholesalers. The company acquires repeat customers through on-site repair services and after-sales support via Daiwa Support Pack (extended warranty service), and aims to maximize customer lifetime value through CRM initiatives leveraging its official app "DAIWA PASSPORT," which has approximately 600,000 registered users.
Company Strengths
In the bicycle sales business for FY2026 (ending January 2026), e-assist bicycles accounted for approximately 65% of sales composition, substantially exceeding the industry-wide average of approximately 48% (2025). The CAGR of e-assist bicycle sales from FY2021 (ending January 2021) to FY2026 (ending January 2026) reached approximately 19%, with the high proportion of high-unit-price product sales driving the expansion of sales scale.
The company provides an "on-site repair service" in which staff travel by motorbike to promptly repair issues such as punctures or lost keys at the customer's location. Combined with the design of placing repair spaces near store entrances to lower the barrier to store visits, this after-sales service approach has enabled the acquisition of repeat customers. The number of official app registrations reached approximately 600,000 as of the end of January 2026.
Private-brand (PB) products, which are produced through direct commissioning to Chinese manufacturers without going through trading companies or wholesalers, account for 33.7% of bicycle sales (directly-operated stores, value basis). The company has built a system that enables market launch in as little as two months of development time and allows customer feedback to be directly reflected in product development. PB products are expected to yield higher gross margins compared to national brand (NB) products, making the increase in the PB ratio a key driver of margin improvement.
ENVALITH's Perspective
Performance Trend
Revenue continued its double-digit growth trajectory, rising from ¥15,340 million in FY2024 to ¥18,349 million in FY2025 and ¥21,107 million in FY2026, with cumulative Q1 FY2027 revenue also up +12.3% year-on-year to ¥6,960 million, maintaining the growth trend. On the other hand, operating profit growth slowed, rising from ¥1,376 million in FY2025 to ¥1,416 million in FY2026, and in the current Q1 as well, operating profit growth (+7.3%) fell below revenue growth (+12.3%) due to increased new-store opening costs and SG&A expenses. Amid heightened uncertainty in the economic environment stemming from external factors such as rising prices, the yen's depreciation trend, and US tariff policy, expanding demand for helmets and other safety equipment driven by the application of the traffic violation notification system has supported revenue. The full-year forecast remains unchanged at ¥24,293 million in revenue (+15.1%) and ¥1,490 million in operating profit (+5.2%).
Growth Strategy
Aiming for a mid-term target of 200 stores and revenue growth of 10% or more through the integrated strengthening of "people, stores, and merchandise"
In Q1 of FY2027 (ending January 2027), the company opened 5 new stores in total—1 in the Kansai area and 4 in the Kanto area—bringing the total to 159 stores by quarter-end. Progress toward the mid-term target of 200 stores remains steady, with continued focus on expansion in the Kanto area. While rising store-opening costs are pressuring profit margins, the company maintains its strategy of prioritizing sales growth through scale expansion.
In preparation for the traffic violation notification system for bicycles set to take effect in April 2026, the company has expanded its lineup of safety equipment such as raincoats and helmets. Parts & Accessories Sales showed strong growth of +19.0% year-on-year (¥926 million), demonstrating that measures to convert regulatory changes into revenue opportunities are proving effective.
The company continues to focus on staff training in preparation for increasing repair demand. Sales of "Other," which includes ancillary services such as Maintenance & Repair Services, grew to ¥566 million (up +11.4% from ¥508 million in the same period last year). The company aims to build customer loyalty and improve repeat visit rates through repair services, which tend to drive frequent store visits.
The company continues to strengthen its CRM and omnichannel strategy leveraging its official app, which has approximately 600,000 registered users. By combining this with seasonal demand initiatives such as the 150-store anniversary thanksgiving sale, the company aims to increase visit frequency and average spend per customer among its existing customer base.
Last updated: July 17, 2026