KAN-NANMARU CORPORATION

Business Details

Operates a total of 30 stores, including Taishu Sushi Sakaba "Jinbei Taro" (13 stores), Taishu Kappo "Shoya" / "Nihonkai Shoya" (12 stores combined), Italian Kitchen "VANSAN" (4 stores), and Karaoke "Koban-chan" (1 store). The business is centered in Saitama Prefecture with expansion into Tochigi, Gunma, and Chiba Prefectures, providing food service to a wide range of customer segments as the company's only reporting segment. Cumulative sales for the third quarter of FY2026 (ending March 2026) were ¥1,395 million, accounting for 97.9% of consolidated sales.

Recent Overview

While sales rose only slightly, segment profit increased significantly by 86.4% year-on-year due to improved labor cost management

In the cumulative third quarter of FY2026 (ending March 2026), sales of the Restaurant & Food Service Business rose only slightly to ¥1,395 million (up 1.6% year-on-year). Meanwhile, improved labor cost management resulting from a review of store operation systems and thorough cost control proved effective, and segment profit increased substantially to ¥79 million, up 86.4% from ¥43 million in the same period of the prior year. However, a decline in customer numbers due to reduced lunch service and variation in dinner-time visitor trends depending on region and location remain challenges, and the company has not yet achieved an overall profit turnaround.

Key Products

Growth Drivers

• Improved labor cost management through review of store operation systems: optimization of staffing and operating hours reduced selling, general and administrative expenses by 1.9% year-on-year, contributing to a substantial improvement in segment profit
• Steady average customer spending through agile price revisions and utilization of seasonal products: menu policy revisions offset customer number declines to a certain extent through higher spending per customer
• Optimization of the format portfolio: converting unprofitable or low-profit stores to growth formats such as "Jinbei Taro" and "VANSAN" to strengthen the sales and earnings base
• Establishment of a 13-store network for the in-house brand "Jinbei Taro": expanding its share of sales composition as the company's most numerous format, functioning as a pillar of earnings
• Improved cost management through menu changes incorporating seasonal ingredients and thorough recipe management

Risks

• Continued rise in raw material and labor costs: price increases in key raw materials including rice, along with rising labor costs from minimum wage increases, are squeezing profitability
• Declining customer trend: reduced lunch operations are lowering daytime customer numbers, while variation in dinner-time performance by region and location is pushing down overall customer numbers
• Sluggish personal consumption: price increases continue to outpace improvements in real wages, keeping the outlook for dining-out demand uncertain
• Company-wide profitability not yet achieved: although segment profit is improving, the burden of company-wide expenses (administrative division SG&A) has resulted in a continued operating loss (operating loss of ¥77 million for cumulative Q3 FY2026, ending March 2026)
• Decline in cash and deposits balance: down from ¥517 million at the end of the previous fiscal year to ¥421 million at the end of the current third quarter, requiring continued monitoring of cash flow
• Impairment risk: an impairment loss of ¥771 thousand was recorded in the cumulative third quarter, and additional impairment may occur at stores with declining profitability