ENVALITH
ワタミ株式会社 logo

WATAMI CO.,LTD.

7522・Prime Market・Retail Trade

Official website
ワタミ株式会社 logo
WATAMI CO.,LTD. 7522

Business

WATAMI CO., LTD. is a Tokyo Stock Exchange-listed company founded in 1986, comprising a comprehensive food service group with 27 consolidated subsidiaries and 3 equity-method affiliates. Domestically, it operates on two main pillars: multi-format food service restaurants (517 locations) spanning izakaya, yakiniku, takeout, special occasion, and SUBWAY formats, and Ready-to-Eat Delivered Bento (506 locations). It also operates Overseas Food Service (81 locations) primarily in Southeast Asia and the United States, an Environmental Business covering electric power retail and wind power generation, and an Agriculture Business involving Organic Agricultural Products and Dairy Farming & Livestock. Consolidated net sales for FY2026 (ending March 2026) were ¥93,268 million. The company targets diverse customer segments including elderly individuals, dual-income households, and inbound tourism demand, and has built its business through vertical integration spanning upstream (agriculture, manufacturing) to downstream (food service, delivery) operations in the food value chain.

Business Model

The Domestic Food Service Business generates revenue growth mainly through increasing customer counts via multi-format expansion of directly-operated and franchised restaurants, while the Home Meal Delivery Business secures stable revenue through a subscription-based model that delivers ready-to-eat bento from its own manufacturing plants to 506 locations nationwide. By centrally managing the MD system covering product development, procurement, logistics, and manufacturing, the company achieves both differentiation and cost reduction. The Agriculture segment supplies agricultural products within the group, and the Environmental Business covers the group's internal power demand, forming an internal circulation structure. Overseas, the company pursues revenue diversification through franchise expansion and Food Processing & Wholesale Business (Leader Food Group, etc.).

Company Strengths

The Home Meal Delivery Business achieved net sales of ¥41,014 million, segment profit of ¥4,311 million, and a profit margin of 10.5% in FY2026 (ending March 2026). The high profit margin is supported by a nationwide network of 506 locations, labor-saving investment through in-house manufacturing plants, and continuous review of procurement and logistics. Cumulative meal deliveries reached 58,783 thousand meals (101.6% year-on-year), giving the company a competitive advantage in both scale and efficiency.

The Domestic Food Service Business has diversified its formats to include Izakaya, Yakiniku, Takeout & Delivery, Special Occasion, SUBWAY directly-operated stores, and franchises, operating 517 stores (42 new store openings) as of the end of FY2026 (ending March 2026). By avoiding dependence on a single format and driven mainly by an increase in customer traffic, the business achieved increased sales and profit, with net sales of ¥37,668 million (109.5% year-on-year) and segment profit of ¥2,263 million (140.5% year-on-year).

Cash and deposits at the end of FY2026 (ending March 2026) stood at ¥43,570 million, substantially exceeding total interest-bearing debt of ¥29,003 million. The net debt-to-equity ratio (net D/E ratio) was -48.30%, effectively indicating a debt-free position. With an equity ratio of 40.4% and a current ratio of 301.2%, the company has ample capacity for growth investments such as new store openings, M&A, and labor-saving investments.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) increased to ¥4,837 million (up 5.9% year on year), primarily driven by an increase in customer traffic in the Domestic Food Service Business. On the other hand, segment profit in the Home Meal Delivery Business declined to ¥4,311 million (91.3% of the prior period), as soaring raw material costs pressured profit margins. Since the Home Meal Delivery Business is the largest profit-contributing segment within the group, a recovery in profitability in this business will be key to future earnings improvement.

Ordinary profit for FY2026 (ending March 2026) increased significantly to ¥6,435 million (up 22.7% year on year), with one major factor being foreign exchange gains of ¥908 million (versus zero in the prior period). This was driven by the yen's depreciation, with the USD exchange rate moving from ¥149.53 to ¥159.93, and as an external factor, there is a risk that ordinary profit could fluctuate depending on future foreign exchange trends. Additionally, impairment losses increased to ¥1,246 million (versus ¥713 million in the prior period), and it is worth noting that the deteriorating profitability of fixed assets, centered on the Overseas Business (¥998 million), continues.

The company has not disclosed its earnings forecast for FY2027 (ending March 2027), citing geopolitical risks such as the conflicts in the Middle East and Ukraine as well as uncertainty in the global economy, leaving investors with a continued lack of visibility into future performance. Prolonged high energy and raw material prices are affecting the cost structures of both the Home Meal Delivery and Food Service businesses, and as an external factor, the risk of rising procurement costs is expected to persist. The expansion of franchise operations in the United States (including the establishment of Watami US Franchise LLC and others) represents a medium- to long-term growth opportunity, but the launch costs and the timeline to profitability remain unclear.

Growth Strategy

Three pillars: expansion of the elderly-focused Home Meal Delivery segment, multi-format development in Domestic Food Service, and entry into the U.S. Franchise Business

In October 2025, the company launched a new product, "Ii Hi no Gozen," targeted at late-stage elderly customers aged 75 and older, achieving increased revenue through higher meal volumes. By reviewing procurement, manufacturing, and logistics to reduce costs, the business aims to balance high quality with low prices and restore profit margins amid rising raw material costs.

While maintaining a multi-format portfolio comprising Izakaya, Yakiniku, Takeout, Special Occasion, and SUBWAY formats, the company opened 42 new stores in FY2026 (ending March 2026), bringing the total to 517 stores at fiscal year-end. Continued growth in customer traffic and reductions in fixed costs led to increased revenue and profit (segment profit up to 140.5% year-on-year).

During the fiscal year, the company newly established Watami US Franchise LLC and H&W Hospitality Partners, LLC, building the corporate foundation for franchise expansion in the United States. In Southeast Asia, 18 new stores were opened (bringing the total to 81 stores at fiscal year-end), and the company is promoting the development and opening of new formats that strengthen product development collaboration with its Domestic Food Service Business in Japan.

In the Environmental Business, despite a decline in net sales due to lower procurement unit prices, segment profit increased significantly to ¥303 million (156.2% year-on-year). In Agriculture, the segment loss narrowed substantially from ¥(150) million in the previous period to ¥(14) million, strengthening vertical integration synergies through the supply of agricultural products to the group's Food Service and Home Meal Delivery businesses.

Last updated: July 19, 2026