ROYAL HOLDINGS Co., Ltd.

Business Details

Operates a diverse range of restaurant formats both in Japan and overseas, including chain stores such as the hospitality restaurant "Royal Host," the tempura rice bowl specialty chain "Tenya," the salad bar & grill "Sizzler," and the pizza restaurant "Shakey's," as well as beer restaurants, cafes, and various specialty restaurants. Overseas, the company is expanding into the U.S. market through its equity-method affiliate SUSHI-TEN USA Inc. This core business accounts for approximately 42% of group sales.

Recent Overview

Sales increased, but ordinary income fell sharply by 37.3% year-on-year due to higher raw material costs and overseas initial expenses

Restaurant Business sales for Q1 FY2026 (ending December 2026) reached ¥16,938 million (up 5.3% year-on-year), securing an increase in sales. Royal Host, Tenya, and the specialty restaurant chains all posted sales growth. On the other hand, in addition to rising raw material costs, the recognition of initial expenses associated with new overseas store openings, including the SUSHI NIGIRIBA opening in the U.S., weighed on results, causing ordinary income to fall sharply to ¥640 million (down 37.3% year-on-year). The Restaurant Business segment recorded an impairment loss of ¥23 million related to stores decided for closure as an extraordinary loss.

Key Products

Growth Drivers

• Increased average customer spending through a high-value-added strategy at existing domestic stores (campaigns utilizing domestic ingredients such as Good JAPAN and premium product offerings)
• Sales expansion through new store openings and renewals of Royal Host, Tenya, Sizzler, and other domestic brands
• Advancement of the global strategy through SUSHI-TEN USA Inc.'s sushi format expansion in the U.S. (opening of second location)
• Underpinning of domestic restaurant demand through the increase in inbound foreign visitors to Japan
• Strengthening of the customer base through the rollout of the group's shared app "MyROYAL"

Risks

• Profit pressure from initial expenses associated with new overseas store openings (in the U.S. and elsewhere), the main cause of the 37.3% decline in Q1 FY2026 ordinary income
• Cost pressure from persistently high raw material costs, packaging costs, and utility costs
• Rising SG&A ratio due to increased labor costs (wage improvements)
• Time-related risk in achieving profitability in overseas operations (U.S. and Asia)
• Risk of impairment losses related to stores decided for closure (¥23 million recorded in Q1 FY2026)
• Impact on inbound visitor trends from geopolitical risks such as deteriorating Japan-China relations