Maruyoshi Center Inc.

Business Details

A vertically integrated retail business in which the Company (Maruyoshi Center) operates supermarkets, subsidiary Fresh Depot Co., Ltd. handles food manufacturing and supply, and Rex Co., Ltd. manages distribution center operations. Under the management philosophy of "health and deliciousness," the Company pursues differentiated products focused on fresh food and delicatessen categories together with the pursuit of "Maruyoshi Quality," aiming to expand market share in the Northern Shikoku trading area centered on Kagawa Prefecture. The Company is also advancing procurement, logistics, and system integration through a capital and business alliance with Izumi Co., Ltd.

Recent Overview

Net sales rose 3.6% year on year, remaining solid, but cost increases led to a sharp 20.3% decline in operating profit

In the first quarter of FY2027 (ending February 2027) (March to May 2026), net sales were ¥10,329 million (up 3.6% year on year), securing revenue growth. However, wages, salaries and bonuses rose to ¥1,244 million (from ¥1,161 million in the same period of the prior year) and repair and maintenance expenses rose to ¥123 million (from ¥102 million), pushing up personnel and maintenance costs and expanding total selling, general and administrative expenses to ¥2,858 million (from ¥2,733 million). Although utility costs declined to ¥202 million (from ¥221 million), the reduction was insufficient to absorb the overall cost increases, resulting in operating profit of ¥80 million (down 20.3% year on year), ordinary profit of ¥70 million (down 25.7% year on year), and quarterly net income attributable to owners of parent of ¥40 million (down 30.0% year on year). There has been no change to the full-year earnings forecast (operating revenue of ¥44,000 million and operating profit of ¥180 million).

Key Products

Growth Drivers

• Reduction in procurement costs and other cost savings through procurement, logistics, and system integration with Izumi Co., Ltd.
• Reduction in utility costs through energy-saving investments such as planned replacement of refrigerators (Q1 results: down from ¥221 million in the same period of the prior year to ¥202 million in the current period)
• Expansion of trading-area market share through strengthening individual store competitiveness and securing the top position in local areas under the Shikoku Strategy
• Increase in average customer spending through "Maruyoshi Quality" improvement initiatives (time-of-day sales floor management, use of digital signage, enhanced hospitality)
• Improved manufacturing efficiency and quality through review of manufacturing lines and equipment renewal at Fresh Depot Co., Ltd.
• Improvement in labor productivity per hour and gross profit per employee through skill development of managers and young employees

Risks

• Increased personnel expenses due to minimum wage hikes and intensifying competition for hiring (Q1 wages, salaries and bonuses: up from ¥1,161 million in the same period of the prior year to ¥1,244 million in the current period)
• Increased costs for cost of goods sold, supplies, and freight due to rising crude oil prices and inflation
• Sluggish personal consumption due to weakening consumer sentiment and a stronger savings orientation amid continued price increases
• Structural risk of shrinking demand in the Northern Shikoku trading area due to population decline and falling real income
• Risk of rising procurement costs due to US tariff policy and geopolitical risks (US-China tensions, Middle East situation, Russia-Ukraine war)
• Q1 progress rate against the full-year operating profit forecast of ¥180 million was only approximately 44%, requiring a recovery over the remaining three quarters