Harima-Kyowa Co., LTD.

Business Details

The company's core business is the wholesale of soaps, detergents, cosmetics, sanitary products, daily sundries, paper products, packaging materials, and other items, and it also operates a Contract Logistics & Transportation Handling Business. The group consists of two subsidiaries (Bloom Co., Ltd. and At Staff Co., Ltd.) and three equity-method affiliates. Major customers are Sugi Pharmacy Co., Ltd. (net sales of ¥9,320 million in the current period) and Don Quijote Co., Ltd. (¥6,942 million). The company's strength lies in its integrated commercial-distribution and physical-distribution services, and it is promoting the development of third-party logistics.

Recent Overview

Sales and operating profit declined, but ordinary profit and net profit increased due to insurance cancellation refund income

In FY2026 (ending March 2026), despite strong sales of seasonal consumables, net sales came to ¥59,843 million (down 3.2% year on year) due to the impact of transaction reviews by certain customers. Operating profit was ¥1,693 million (down 11.4% year on year), affected by initial costs and increased depreciation expenses (¥513 million in the current period versus ¥278 million in the prior period) related to the Chubu Komaki Logistics Center (which began operations in October 2025). On the other hand, the recording of ¥282 million in insurance cancellation refund income lifted ordinary profit to ¥2,084 million (up 8.0% year on year) and net profit to ¥1,513 million (up 17.4% year on year). Sales to major customer Sugi Pharmacy expanded to ¥9,320 million (from ¥8,321 million in the prior period), and sales to Don Quijote expanded to ¥6,942 million (from ¥6,378 million). The dividend was increased to ¥60 per share (from ¥50 in the prior period).

Key Products

Growth Drivers

• Deepening transactions with major customers (Sugi Pharmacy Co., Ltd. and Don Quijote Co., Ltd.), with sales to Sugi Pharmacy at ¥9,320 million and to Don Quijote at ¥6,942 million, both increasing year on year
• Strengthening of the logistics network through the stabilization of operations at the Chubu Komaki Logistics Center, along with future improvements in utilization rates and cost efficiency
• Expansion of sales backed by resilient demand for seasonal consumables and daily necessities
• Capturing demand for consolidated transactions from large-scale retailers through integrated commercial-distribution and physical-distribution services
• A growth plan forecasting net sales of ¥64,000 million (up 6.9% year on year) and operating profit of ¥1,700 million (up 0.4% year on year) for FY2027 (ending March 2027)

Risks

• Risk of transaction reviews by certain customers (the impact of which already materialized as a 3.2% decline in net sales in the current period)
• Increased full-year depreciation burden associated with capital investment such as the Chubu Komaki Logistics Center (depreciation expenses will be incurred for a full year in FY2027, ending March 2027)
• Since insurance cancellation refund income (¥282 million in the current period) is not expected to recur in the next period, ordinary profit and net profit are forecast to decline year on year (FY2027 ordinary profit forecast of ¥1,800 million, down 13.6%; net profit forecast of ¥1,230 million, down 18.7%)
• Sluggish growth in sales volume due to intensifying consumer thrift and suppressed purchase unit prices amid rising prices
• Expansion of selling, general and administrative expenses due to rising logistics costs and wage increases stemming from labor shortages (SG&A expenses of ¥6,002 million in the current period versus ¥5,318 million in the prior period)
• Deteriorating consumption environment and heightened uncertainty due to the prolonged situation in the Middle East, rising interest rates, and continued price increases
• Intensifying competitive environment among retailers due to escalating price competition and expansion of private brands