WATAMI CO.,LTD.

Business Details

This segment centers on directly-operated and franchise management of restaurants in Japan and Guam, USA, along with manufacturing and wholesale of food ingredients and procurement/supply of alcoholic beverages. It operates a diverse range of formats including the Izakaya Format (Miraizaka, Torimero), Yakiniku Format (Yakiniku no Watami, Kamimura Bokujo), Takeout & Delivery Format (Olive Chicken), Special Occasion Format (TGI Fridays), and the SUBWAY Business, responding to diversifying customer needs. The number of stores at the end of FY2026 (ending March 2026) was 517 (a net increase of 25 stores from the prior fiscal year-end).

Recent Overview

Higher revenue and profit driven by increased customer traffic; 42 new store openings and 17 closures brought the total to 517 stores

In FY2026 (ending March 2026), 42 new stores were opened and 17 stores were closed, bringing the total number of stores at fiscal year-end to 517. Sales reached ¥37,668 million (109.5% YoY) and segment profit reached ¥2,263 million (140.5% YoY), achieving substantial growth in both revenue and profit. The main driver of the increase in operating profit was higher revenue from increased customer traffic. The multi-format expansion across izakaya, yakiniku, takeout, special occasion, and SUBWAY formats, together with ongoing efforts to improve productivity and reduce fixed costs, proved effective. An impairment loss of ¥196 million was recorded (¥218 million in the prior fiscal year).

Key Products

Growth Drivers

• Revenue growth effect primarily driven by increased customer traffic (sales at 109.5% YoY, segment profit at 140.5% YoY)
• Scale expansion through 42 new store openings (517 stores at fiscal year-end)
• Response to diversifying customer needs through multi-format expansion including izakaya, yakiniku, takeout, special occasion, and SUBWAY formats
• Improved profit margins through ongoing efforts to enhance productivity and reduce fixed costs
• Differentiation from competitors through continuous review of the MD system (product development, procurement, logistics, manufacturing)
• Expansion of the store network through continued development of the SUBWAY Business

Risks

• Risk of delayed response to the structural contraction trend in the izakaya market and changes in customers' dining styles
• Cost pressure from persistently high energy and raw material prices
• Increased labor costs due to rising wage pressure
• Risk of impairment losses related to stores scheduled for closure (¥196 million recorded in the Domestic Food Service segment for the current fiscal year)
• Rising costs of securing and training personnel, and challenges in employee retention rates
• Fluctuations in raw material and energy prices due to geopolitical risks such as the conflicts in the Middle East and Ukraine