ENVALITH
エコートレーディング株式会社 logo

ECHO TRADING CO.,LTD.

7427・Standard Market・Wholesale Trade

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エコートレーディング株式会社 logo
ECHO TRADING CO.,LTD.7427

Business

ECHO TRADING CO.,LTD. is a wholesale company specializing in pet-related products, founded in 1971. The company comprises itself and three consolidated subsidiaries—Pets Value Co., Ltd., I&I Co., Ltd., and Pet Pet Co., Ltd.—and, centered on the Pet Food & Pet Supplies Wholesale Business, operates broadly across product development, store development, sales promotion, operation of a comprehensive pet information website, and pet-related education. Its main customers are distributors such as pet specialty retailers and mass merchandisers. Pet food accounts for 77.0% of net sales, with cat food being the largest category at 32.2%. Kokubu Group Corporation is listed as another affiliated company through a capital and business alliance. The company is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

Purchases pet food and pet supplies developed by manufacturers, and wholesales them to retailers with added value such as sales floor proposals, promotional planning, and product development support based on the CED (Communication, Education/Entertainment, Design) concept. The business operates on a thin-margin structure with an operating profit margin of approximately 1.0-1.6%. Store development by subsidiary Pets Value Co., Ltd. (managing 215 stores) and original product development and promotion of brands such as ShareZ by I&I Co., Ltd. serve as differentiating functions.

Company Strengths

In sales performance for FY2026 (ending February 2026), cat food maintained its position as the largest category at ¥34,297 million, accounting for 32.2% of the composition, and achieved 102.8% year-on-year growth, the only category to post positive growth. Amid the continued decline in the number of dogs kept as pets, expanding demand for cats is functioning to support sales.

The company operates multiple distribution centers spanning from Hokkaido to Kyushu, implementing joint delivery and simultaneous multi-store shipping operations using tablets to curb logistics costs, as well as AI-OCR to reduce administrative workload. Continuous infrastructure development is being carried out, including the establishment of the Takaoka Distribution Center in August 2024.

Pets Value Co., Ltd. handles store development (managing 215 stores), while I&I Co., Ltd. is responsible for original product development, such as fresh meals under the ShareZ brand, and planning of sales promotion tools. By integrating product development and promotion functions with wholesale operations, the company is promoting value-proposition-based sales that do not rely on price competition.

ENVALITH's Perspective

Operating profit for Q1 FY2027 (ending February 2027) fell sharply to ¥8 million (versus ¥206 million in the same period of the prior year), a 96.1% decline. While net sales increased 2.9% YoY to ¥27,285 million, securing revenue growth, gross profit declined to ¥2,778 million (versus ¥2,895 million in the same period of the prior year), and SG&A expenses of ¥2,770 million absorbed nearly the entire amount. Against the full-year operating profit forecast of ¥1,150 million, Q1 results amounted to just ¥8 million, meaning that ¥1,142 million in profit must be accumulated over the remaining three quarters. Although the full-year forecast remains unchanged, achieving it presupposes a considerable weighting toward the second half, and the feasibility of the forecast warrants careful scrutiny from the standpoint of progress rate.

The main causes cited for the sharp decline in Q1 profit are the ongoing rise in logistics costs and changes in transaction terms with certain customers. The cost of sales ratio rose to 89.8% in Q1 (versus 89.1% in the same period of the prior year), with increases in procurement costs and logistics expenses squeezing gross profit. As external factors, cost increases across the entire supply chain—driven by inflation, labor costs, raw material costs, and logistics costs—are spreading throughout the industry, and there are limits to what the company can address on its own. Progress in price pass-through and renegotiation of transaction terms will be key to earnings recovery.

Total assets at the end of Q1 FY2027 (ending February 2027) increased to ¥43,769 million (versus ¥38,899 million at the end of the previous fiscal year), while the equity ratio declined to 27.4% (versus 31.3% at the end of the previous fiscal year). Short-term borrowings increased by ¥1,975 million, from ¥1,650 million to ¥3,625 million, clearly illustrating a structure in which seasonal working capital needs are being funded through borrowing. Net assets decreased by ¥169 million to ¥12,008 million. The recording of a quarterly net loss attributable to owners of the parent of ¥6 million, along with a decrease in valuation difference on available-for-sale securities, pushed down net assets. From the standpoint of financial soundness, a recovery in the equity ratio driven by improved profitability in the second half is called for.

Growth Strategy

Rebuilding the earnings foundation through the launch of the new medium-term management plan, deepening of the CED strategy, consolidation of product development at I&I, and rollout of a new brand

The new medium-term management plan will be launched from FY2027 (ending February 2027). Building on the business portfolio optimization achieved through "selection and concentration" up to the previous period, the Company will drive a transition to a new growth stage. It targets full-year net sales of ¥110,000 million (up 4.0% year on year) and operating profit of ¥1,150 million (up 3.6% year on year).

"Connect" and "Data Science" have been added to the conventional CED strategy. Leveraging the Company's proprietary data analysis platform, the Company will deepen value-driven proposals that produce safety, security, nutrition, and health, aiming to differentiate itself from mere price competition.

From this period, the Group's product development functions have been consolidated at I&I, continuing the development of valuable products that capture consumer needs under the concept "A! Kore Iine" (Ah! This is nice). Sales volume of the ShareZ brand "Magokoro Gohan" has been steadily increasing, contributing to the expansion of new categories.

The pet food brand "GOODISH" (Goodish), inherited from FANCL Corporation, is scheduled to be relaunched in autumn 2026. As a high-value-added product focused on health and wellness, the Company aims to establish a new revenue source that capitalizes on the market environment shaped by the ongoing humanization of pets.

"Everyone Loves It!! Pet Kingdom 2026" was held on May 2–3, 2026, attracting more visitors than the previous year. The Company will continue and expand experience-based content such as the "Pet's Feelings Research Lab," aiming to enhance brand value through direct engagement with consumers and generate positive spillover effects for the wholesale business.

Last updated: July 17, 2026