ENVALITH
スギホールディングス株式会社 logo

SUGI HOLDINGS CO.,LTD.

7649・Prime Market・Retail Trade

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スギホールディングス株式会社 logo
SUGI HOLDINGS CO.,LTD.7649

Business

SUGI HOLDINGS is a holding company centered on a drugstore chain with in-store dispensing pharmacies founded in 1976 in Nishio City, Aichi Prefecture. Its core operating company, Sugi Yakkyoku Co., Ltd., pursues a "Total Healthcare Strategy" that integrates the sale of pharmaceuticals, health foods, cosmetics, and daily necessities with prescription dispensing services. Through the consolidation of I&H Corporation (a dispensing pharmacy chain) as a subsidiary, the company operates 2,186 stores nationwide (as of end-February 2025), spanning from Hokkaido to Kyushu. The group also encompasses home-visit nursing care, support for opening medical institutions, and overseas trading businesses, strengthening its function as regional healthcare infrastructure. Its main customers are general consumers and patients holding prescriptions, and its demand base is expanding alongside the progression of an aging society.

Business Model

Of net sales of ¥878,021 million (FY2025, ended February 2025), the business is composed of two pillars: product sales of ¥648,505 million and dispensing pharmacy of ¥218,866 million. In product sales, cost reduction and sales promotion optimization through manufacturer-distributor-retailer collaboration leveraging the Sugi Yakkyoku App improve gross profit. In dispensing pharmacy, growth in the number of prescriptions filled and expansion of home healthcare services build up high value-added revenue. The structure enhances customer convenience and promotes repeat store visits through increased trade area density from dominant-area store openings and renovation of existing stores.

Company Strengths

Sales grew from ¥625,477 million in FY2022 (ending February 2022) to ¥1,010,336 million in FY2026 (ending February 2026), roughly 1.6-fold growth over five years. The company achieved its medium-term management plan target of ¥1 trillion in sales one year ahead of the original schedule. The consolidation of I&H Corporation as a subsidiary (acquiring 376 stores) and the opening of more than 130 new stores annually drove this scale expansion.

As a Drugstore with In-Store Dispensing Pharmacy (Sugi Yakkyoku), the company provides prescription dispensing, home healthcare, and retail sales in an integrated format. Dispensing pharmacy sales in FY2025 (ending February 2025) reached ¥218,866 million (up 37.8% year on year), maintaining high growth. The structural increase in the number of prescriptions handled due to the advancing aging population has supported dispensing pharmacy sales, while synergy with retail sales has enhanced customer traffic.

The company is advancing purchase data-linked manufacturer-distributor-retailer collaboration through the Sugi Yakkyoku App (Digital Marketing Platform), achieving cost reductions and optimized sales promotion in the retail segment. Gross profit in FY2025 (ending February 2025) reached ¥275,043 million (up 20.2% year on year), a growth rate exceeding that of sales, reflecting the gross margin improvement effect from utilizing the app.

ENVALITH's Perspective

Net income attributable to owners of the parent for Q1 of FY2027 (ending March 2027) fell sharply to ¥6,901 million (down 67.5% year on year), but this was due to a one-off tax effect in the same period last year — the additional recognition of deferred tax assets (income taxes-deferred of ¥(12,554) million) associated with the absorption-type merger of the former I&H Corporation. Core-business operating profit grew a solid 10.9%. Investors should not be misled by the superficial decline in net income and should instead focus on the underlying trends in operating profit and EBITDA.

Ordinary income for Q1 of FY2027 (ending March 2027) came to only ¥11,588 million (up 1.9% year on year), significantly underperforming the growth in operating profit (up 10.9%). The main causes were a sharp increase in equity-method investment losses, which rose from ¥24 million to ¥1,170 million year on year, and an expansion in interest expense from ¥104 million to ¥390 million, driven by bond issuances and other factors. The equity-method losses could disappear once Seki Yakuhin becomes a consolidated subsidiary, but the increasing trend in financial costs warrants continued monitoring.

In July 2026, the company resolved a third-party allotment of new shares to GIC Private Limited (5,082,000 shares, issue price of ¥3,195, raising ¥16,008 million), and in September 2026, Seki Yakuhin is scheduled to become a consolidated subsidiary along with a stock split (1 share to 2 shares). The proceeds are earmarked for store openings, DX, AI, and M&A, raising expectations for accelerated growth investment. At the same time, careful assessment is needed of integration costs, increases in goodwill, and dilution risk arising from the simultaneous progress of multiple large-scale initiatives. External cost pressures also remain, stemming from continued price inflation and geopolitical risk.

Growth Strategy

Accelerating sustainable growth toward over ¥1 trillion through store openings, M&A, dispensing pharmacy DX, and GIC capital utilization

In the first quarter of FY2027 (ending February 2027), 34 new stores were opened and 55 stores were renovated, bringing the total store count to 2,343 at quarter-end. Competitiveness is being strengthened through early ramp-up of new stores and renovation of existing stores tailored to local area needs. The company plans to continue aggressive store opening investment for the full fiscal year.

Seki Yakuhin is scheduled to become a consolidated subsidiary effective September 1, 2026. The impact of this transaction on full-year results for FY2027 (ending February 2027) is currently under review. Expansion of business scale and early synergy creation (mutual complementarity between dispensing pharmacy and retail merchandise) are expected.

Resolved by the Board of Directors on July 9, 2026. 5,082,000 shares of common stock will be issued at ¥3,195 per share, raising ¥16,008 million to be allocated to store openings and existing store renovation investment, DX/AI-related investment (including SCM), and strategic investment and M&A. The payment date is scheduled for July 27, 2026.

The company is strengthening its capacity to respond to advanced specialized prescriptions and home-visit dispensing through expansion and renovation of dispensing rooms and waiting areas, and enhanced cooperation with medical institutions. Productivity is being improved through optimal staff allocation enabled by the spread of prescription transmission apps and automation of non-patient-facing tasks. The advancing aging of the population also provides a tailwind in terms of market environment.

The company is promoting purchase-data-linked sales promotion utilizing the Sugi Yakkyoku App (Digital Marketing Platform) and expanded sales of private brand products. Gross profit in the first quarter of FY2027 (ending February 2027) increased 10.2% year-on-year, exceeding the rate of sales growth (up 10.1%), reflecting the effect of gross margin improvement in the numbers.

The company is progressively expanding the number of stores with solar panels installed by utilizing a third-party ownership model that limits initial investment. This simultaneously pursues the realization of a decarbonized society and reduction of energy costs. Continued participation in the United Nations Global Compact is also enhancing ESG information disclosure.

Last updated: July 17, 2026