KAPPA CREATE CO.,LTD.
7421・Prime Market・Retail Trade
Business
Kappa Create Co., Ltd. is the operating company of "Kappa Sushi," a conveyor-belt sushi chain belonging to the Colowide Group. Its core business is the Conveyor-Belt Sushi Business, which operates 299 directly-operated stores (as of the end of FY2026 (ending March 2026)) in Japan and overseas. The company also operates the Delica Business through its subsidiary Japan Fresh Co., Ltd., which manufactures and sells sushi and prepared bread for convenience stores and supermarkets. Its main customers span a wide range of age groups, centered on families, and it caters to diverse needs ranging from value-priced products at ¥110 (tax included) to high-value-added products. By sales, the Conveyor-Belt Sushi Business accounts for approximately 81%, and the Delica Business for approximately 19%.
Business Model
In the Conveyor-Belt Sushi Business, revenue is recorded through dining services provided at directly-operated stores, while raw material costs are contained through joint procurement with the Colowide Group and menu development leveraging cross-format collaboration. In the Delica Business, food products are supplied to convenience stores and supermarkets through manufacturing at the company's own factories, also utilizing ingredient and product synergies with the Conveyor-Belt Sushi Business. Labor savings and productivity improvements through capital investment (automated guidance systems, self-checkout registers, etc.) support the improvement of the earnings structure.
Company Strengths
Joint procurement and cross-format menu development with the parent Colowide Group (over 107 companies) have reduced raw material costs and food loss. Group synergies provide a procurement scale that would be difficult for a standalone company to achieve, forming the foundation for ongoing cost control.
Automated guidance systems have been installed at a cumulative 287 stores, and self-checkout registers at a cumulative 249 stores. DX initiatives utilizing AI for work scheduling, shift creation, and training manuals are in test operation, advancing labor savings and optimized staff allocation to standardize store operations.
The company balances price appeal—with core products priced at ¥110 (tax included) and value-oriented products at ¥90 (tax included)—with value appeal through limited-time fairs, collaboration products with well-known brands, and all-you-can-eat offerings rolled out across all stores. It has a track record of appealing to a diverse customer base, including acquiring new customers through active senior discount cards and character collaborations.
ENVALITH's Perspective
Performance Trend
Revenue has maintained a moderate growth trend, rising from ¥67,206 million in FY2022 to ¥73,193 million in FY2026, but profitability has fluctuated significantly. Following a return to profitability in FY2024 (operating profit of ¥1,693 million), operating profit declined for two consecutive periods to ¥1,433 million in FY2025 and ¥532 million in FY2026. In FY2026, the recording of an impairment loss of ¥715 million (85 domestic stores, 2 overseas stores, and 1 domestic plant) weighed on results, pushing the company into a net loss attributable to owners of the parent of ¥394 million. As an external factor, sustained high raw material and energy prices along with rising labor costs pushed down the gross profit margin by 1.2 percentage points year-on-year, and cost pressures continue. Operating cash flow remained positive at ¥2,527 million, but declined substantially from ¥3,833 million in the previous period.
Growth Strategy
Aiming for sales growth and earnings recovery through four pillars: strengthening existing stores, planned new store openings, deepening DX, and overseas expansion
Enhance the competitiveness of existing stores by continuously improving NPS scores and employee engagement scores while strengthening QSC. Through a dual approach combining price appeal and value appeal, the company aims to address diverse consumer needs and expand sales via stable customer count growth.
22 stores were renovated during the current period, expanding the cumulative number of stores with automated guidance systems to 287 and self-checkout registers to 249. The company continues test operations of AI-driven work scheduling, shift creation, and DX-based training manuals, promoting the standardization and labor-saving of store operations.
Store openings are being promoted along three axes: "major urban station-front locations," "suburban commercial facilities and roadside locations," and "establishing positions in new trading areas." Four stores were opened during the current period, bringing the total to 299 stores at period-end. Planned store openings will continue in FY2027 (ending March 2027) to expand the store network.
The Indonesia business showed steady sales due to successful marketing measures, with 2 new stores opened and 1 store renovated during the current period. The South Korea business is promoting store openings through reform of its profit model. The company also continues to research candidate locations for openings in third countries overseas and strengthen relationships with local partners.
Sales in both categories grew due to a shift in sales strategy toward Prepared Bread & Ambient-Temperature Bread and aggressive sales promotion measures. The Dessert Products business is also on a growth trajectory, having acquired new business partners. However, the segment loss widened to ¥46 million in FY2026 (ending March 2026) (compared to a loss of ¥26 million in the previous period), and profitability remains an ongoing challenge.
Last updated: July 19, 2026