ZETT CORPORATION

Business Details

The ZETT Corporation Group operates a single Sports Business segment that integrates the manufacturing, wholesale, retail, and logistics of sporting goods. The wholesale division, which accounts for approximately 97% of net sales, is the core business, selling to domestic sporting goods retailers and mass merchandisers. The manufacturing division (ZETT Create), the retail division (Lodge), and the logistics division (Zyro/Jusupro) function in complementary roles. In FY2026 (ending March 2026), both net sales and ordinary income reached record highs.

Recent Overview

Net sales and ordinary income reached record highs, but net income fell sharply due to the disappearance of extraordinary gains

In FY2026 (ending March 2026), net sales were ¥58,655 million (up 6.1% year on year), operating income was ¥1,251 million (up 16.7% year on year), and ordinary income was ¥1,461 million (up 14.8% year on year), with both net sales and ordinary income reaching record highs. On the other hand, because the gain on sale of investment securities of ¥2,952 million recorded in the prior period was zero in the current period, profit attributable to owners of parent fell sharply to ¥975 million (down 67.4% year on year). Operating cash flow decreased sharply to ¥285 million due to an increase in income taxes paid of ¥1,332 million (versus ¥274 million in the prior period). For the following fiscal year (FY2027, ending March 2027), the company forecasts net sales of ¥59,500 million (up 1.4% year on year) and operating income of ¥980 million (down 21.7% year on year), anticipating a decline in profit levels against a backdrop of rising costs.

Key Products

Growth Drivers

• Rising health consciousness and expansion of the sports and lifestyle market (increased demand for running, outdoor, and high-performance shoes, etc.)
• Increasing numbers of participants in baseball, soccer, and other sports, and heightened interest in sports due to the success of Japanese athletes overseas
• Continued inbound demand (table tennis equipment, track spikes, etc.)
• Strengthened relationships with business partners through proposal-based sales and expanded handling of core brands
• Increased sales in the manufacturing division due to high market evaluation of new-standard hard-type metal bats and white spikes compliant with new high school baseball standards
• Improved logistics efficiency through the promotion of capital investment aimed at labor-saving
• Rising demand for high-priced rackets in tennis and badminton equipment

Risks

• Elevated manufacturing costs remaining high due to rising raw material prices and the continued weak yen against the US dollar
• Concerns over a long-term decline in the number of sports participants due to the effects of the declining birthrate
• Risk of sluggish sales of seasonal products (high-priced apparel, etc.) due to climate change (mild winters, etc.)
• Concerns over a slowdown in the global economy and rising procurement costs due to US trade policy (tariff increases, etc.)
• Pressure on profitability from rising logistics costs and rising labor costs
• Risk of decline in the net selling value of inventories (uncertainty in demand forecasting)
• Equity ratio falling short of the management target (50%) (45.5% as of the end of March 2026)
• Deterioration in the ratio of interest-bearing debt to operating cash flow (from 0.6 years in the prior period to 5.1 years in the current period), indicating weakened cash generation capacity
• The challenge of moving away from a net income structure dependent on extraordinary gains such as gains on sale of investment securities