ZENSHO HOLDINGS CO.,LTD.

Business Details

Operates the "Sukiya" beef bowl chain directly in Japan as well as in China, Southeast Asia, and Latin America. Centered on the mainstay beef bowl product, the segment offers safe, delicious food at affordable prices, targeting families and group customers. It leverages MMD (Mass Merchandising System), which manages everything from ingredient procurement to manufacturing, logistics, and sales in an integrated manner, achieving both cost competitiveness and quality. As of the end of FY2026 (ending March 2026), the segment operated 2,650 stores in total, comprising 2,000 domestic stores and 650 overseas stores.

Recent Overview

Revenue increased 6.3%, but price cuts and rising costs led to a sharp 62.0% decline in operating profit

Full-year revenue for FY2026 (ending March 2026) reached ¥314,454 million (+6.3% YoY), securing revenue growth, but operating profit fell sharply to ¥9,317 million (△62.0% YoY). In addition to rising raw material costs from soaring rice prices and increases in imported beef and other ingredients, the beef bowl price cut implemented to prioritize value for customers significantly squeezed profitability. Existing store sales YoY remained solid at 104.3%. During the period, 112 stores were opened and 83 closed, for a net increase of 29 stores. The company continued safety and hygiene measures (enhanced cleaning and planned renovations of aging stores) in response to the foreign object contamination incident at the end of the prior fiscal year.

Key Products

Growth Drivers

• Continued growth in existing store sales (104.3% YoY for full-year FY2026, ending March 2026)
• Expansion of business scale through aggressive overseas store openings (650 overseas stores across China, Southeast Asia, and Latin America)
• Cost competitiveness through integrated management of ingredient procurement, manufacturing, and logistics via MMD (Mass Merchandising System)
• Maintaining customer traffic and average spend through continuous introduction of seasonal and variety menu items
• Improved store quality and enhanced mid-to-long-term customer draw through planned renovations of aging stores

Risks

• Decline in profitability due to lower average customer spend from the beef bowl price cut (full-year FY2026 operating profit down 62.0% YoY, with operating margin sharply declining from 8.3% to 2.9%)
• Upward pressure on raw material costs from soaring rice prices and rising prices of imported beef and other ingredients
• Risk of recurrence of foreign object contamination incidents and impact on brand image (continued safety and hygiene cost burden)
• Rising labor costs and utility costs due to wage increases and higher energy costs
• Foreign exchange risk (impact on overseas store earnings and imported ingredient costs)
• Impairment loss risk (depreciation and amortization rose 14.7% YoY to ¥14,354 million, expanding risk associated with the increase in fixed assets)