KOHNAN SHOJI CO.LTD.
7516・Prime Market・Retail Trade
Business
KOHNAN SHOJI CO.,LTD. was founded in 1978, originating in Sakai City, Osaka Prefecture, and is the largest home center group in Japan. The company operates 669 stores domestically and internationally (as of the fiscal year ended February 2026), handling a wide range of product categories including DIY products, household goods, pets, and food. Its consolidated subsidiaries include Ken Depo Co., Ltd., which handles building materials wholesale, and Home Improvement Hirose Co., Ltd., which handles housing-related products and food retail, and the company also has overseas operations in Vietnam and Cambodia. In addition to general consumers (demand for DIY and daily necessities), its main customers also include professional contractors in construction and renovation (PRO format). Listed on the Prime Market of the Tokyo Stock Exchange.
Business Model
The main revenue source is merchandise sales at stores (net sales of ¥502,059 million). The company operates five divisions—Home Improvement, Housekeeping (Household Goods), Pet & Leisure (Pet & Leisure Products), and Food—expanding scale through aggressive store openings to secure gross profit while containing procurement costs. Building Materials Wholesale (Ken Depo), EC business enhancement, and reform (renovation) services are also being cultivated as revenue sources. The operating margin stood at approximately 4.5% (FY2026, ending February 2026), maintaining stable earnings at a level typical for the retail industry.
Company Strengths
As of the end of FY2026 (ending March 2026, February fiscal year-end), the group operated 669 stores in Japan and overseas. In the most recent FY2025 (ending March 2025, February fiscal year-end, the final year of the Third Medium-Term Management Plan), the company opened 43 new stores, reaching 636 stores at fiscal year-end. The company continues to pursue active store openings, and under the Fourth Medium-Term Management Plan, further store expansion is planned through the end of FY2028 (ending March 2028, February fiscal year-end).
In addition to KOHNAN's core home center format, the group operates Ken Depo (88 stores), which specializes in building materials wholesale, and Hirose (33 stores), which focuses on food and housing-related products, covering a wide range of customers from general consumers to professional contractors. A store-opening strategy centered on the PRO format is set as Priority Strategy ① in the Fourth Medium-Term Management Plan.
In FY2026 (ending March 2026, February fiscal year-end), sales in the Food segment reached ¥14,215 million (up 125.2% year on year), and purchasing performance also increased 129.1% year on year, marking the highest growth rate among all segments. By strengthening the food category, the company aims to increase store visit frequency and average customer spend, executing a strategy to offset the low visit frequency that is a weakness of the home center business.
ENVALITH's Perspective
Performance Trend
Net sales expanded for five consecutive periods, from ¥425,704 million in FY2022 to ¥502,059 million in FY2026, but operating profit had been on a declining trend since peaking at ¥25,788 million in FY2022, falling to ¥22,397 million in FY2026. However, in Q1 of FY2027 (ending February 2027) (March–May 2026), the company achieved substantial profit growth across all profit line items: operating revenue of ¥146,219 million (up 11.8% year-on-year), operating profit of ¥10,151 million (up 42.8% year-on-year), ordinary profit of ¥9,770 million (up 51.5% year-on-year), and quarterly net income attributable to owners of the parent of ¥6,655 million (up 52.2% year-on-year). As an external factor, a slowdown in the rate of price increases and improvement in the employment and income environment supported consumer sentiment, while high growth in the Housekeeping (Household Goods) segment (119.7% year-on-year) and efficient management of SG&A expenses drove the improvement in profit margin. Equity-method investment gains of ¥381 million from Arenza Holdings also contributed for the first time. The full-year forecast (operating profit of ¥23,000 million, up 2.7% year-on-year) has been left unchanged, and the Q1 progress rate stands at a high 44.1%.
Growth Strategy
Aiming for revenue of ¥560,000 million and operating profit of ¥29,000 million in the 4th Medium-Term Management Plan (through FY2028, ending February 2028)
In Q1 of FY2027 (ending February 2027), the group opened 8 stores and closed 3 stores overall, expanding the total number of stores at period-end to 674 (658 domestic, 16 overseas). KOHNAN SHOJI CO.,LTD. (Single Segment) alone opened 7 stores, maintaining its store opening pace, and the groundwork toward the revenue scale expansion target of the 4th Medium-Term Management Plan is progressing.
On April 6, 2026, the company acquired 38.79% of the voting rights of Arenza Holdings, making it an equity-method affiliate. Results from the deemed acquisition date of March 1, 2026 onward began to be recorded as equity in earnings of affiliates (¥381 million in Q1 of FY2027, ending February 2027). The allocation of acquisition cost is still at a provisional accounting stage.
A capital and business alliance agreement was concluded on June 30, 2026. The alliance promotes mutual supply of private brand products and deeper market penetration in the Kansai and Kanto regions. Disposal of treasury shares to Valor Holdings (719,400 shares, disposal price of ¥4,170 per share, total amount of approximately ¥2,999 million) is scheduled to take place on July 16, 2026. The proceeds are planned to be allocated to strategic investments among the three companies from July 2026 to February 2029.
The Housekeeping (Household Goods) segment recorded the highest growth rate of all segments in Q1 of FY2027 (ending February 2027), at ¥44,942 million (119.7% year-on-year). The Food segment also performed steadily (109.4% year-on-year), contributing to increased store visit frequency. The rising share of high-gross-margin categories in the revenue mix contributed to improvement in the gross profit margin (gross profit margin: ¥52,521 million ÷ ¥141,601 million = 37.1%).
Last updated: July 17, 2026