FUJI CO.,LTD.

Business Details

Centered on Fuji Co., Ltd., the company operates multiple formats including supermarkets (Fuji, Marunaka, Maxvalu), discount stores (The Big), and mobile supermarkets. As a member of the AEON Group, it focuses on general retail business in the Chugoku, Shikoku, and Hyogo areas, while also providing lifestyle-related services such as dining, electronic money, fitness, travel, and nursing care. Following the absorption-type merger in March 2024, the company restarted as the new Fuji, with a long-term target of ¥1 trillion in operating revenue by fiscal year 2030.

Recent Overview

Q1 operating profit fell sharply by 79.4% year on year to ¥391 million; full-year forecast unchanged

In the first quarter of FY2027 (ending March 2027) (March to May 2026), both net sales and gross profit fell below the previous year's results, due to the reversal of special demand from the previous year's rise in agricultural produce prices and rice shortages, combined with a decline in gross margin resulting from rising merchandise procurement costs and the pursuit of a "low-price" appeal. Although selling, general and administrative expenses decreased 2.1% year on year to ¥58,450 million, operating profit fell sharply to ¥391 million (down 79.4% year on year), and quarterly net income attributable to owners of parent fell to ¥66 million (down 94.2% year on year). On the other hand, the company carried out renovations at 8 stores (renovated stores saw sales increase 4.6% year on year) and opened 1 new store as planned. Signs of improvement were observed in May, and there has been no change to the full-year earnings forecast (operating revenue of ¥825,000 million, operating profit of ¥17,000 million). As a subsequent event, on June 1, 2026, the company implemented a transfer between retirement benefit plans following the partial termination of its defined benefit corporate pension plan, and plans to record an extraordinary gain in the second quarter (amount currently being calculated).

Key Products

Growth Drivers

• Enhancing store competitiveness through existing store renovations (8 stores renovated in Q1 of FY2027 ending March 2027, with renovated store sales up 4.6% year on year) and scrap-and-build initiatives
• Strengthening the "low-price" appeal: improving delivery efficiency by reducing delivery distances, promoting the introduction of Topvalu private brand products, and curbing rises in procurement costs through the integration of fresh food operations
• Differentiation and gross margin improvement through the development and expansion of proprietary original products ("local flavors," "local production for local consumption")
• Improved work efficiency and productivity through the sophistication of automatic ordering systems equipped with demand forecasting and the introduction of electronic shelf labels
• Acquisition of new demand and strengthening of community ties through the expansion of mobile supermarket sales routes (cumulative 96 locations, 148 vehicles, 805 routes, sales up 3.7% year on year)
• Expected recording of extraordinary gain from the second quarter onward due to the transition of the retirement benefit plan following the partial termination of the defined benefit corporate pension plan (June 2026)
• Prompt utilization of integration synergies and scale merits in the final year of the 2024-2026 medium-term management plan to resolve issues

Risks

• Impact on average customer spending and visit frequency due to intensified consumer thrift-consciousness amid continued price increases and sluggish growth in real income (Q1 net sales down 1.5% year on year)
• Risk of a downturn from the reversal of special demand related to high agricultural produce prices and rice shortages: downward pressure on sales and gross profit if the special demand from the previous year fades
• Decline in gross margin due to the difficulty of balancing rising merchandise procurement costs with the pursuit of a "low-price" appeal (Q1 gross margin: 27.8% in the same period of the previous year → 27.1% in the current period)
• Profit margin pressure from rising costs across the board, including labor, logistics, and energy costs (Q1 operating margin at an extremely low level of 0.2%)
• Market contraction due to population decline and the declining birthrate/aging population, and intensifying competition beyond business format boundaries (from same-industry, different-industry, and e-commerce competitors)
• Risk of impairment losses on fixed assets (an impairment loss of ¥11,880 million was recorded in the previous fiscal year, FY2026 ending March 2026)
• Business continuity risk in the event of natural disasters (earthquakes, wind and flood damage) due to the concentration of operations in the Chugoku, Shikoku, and Hyogo areas
• Uncertainty going forward due to soaring energy and raw material prices amid heightened tensions in the Middle East, and due to the depreciation of the yen and rising long-term interest rates