ARCLANDS CORPORATION

Business Details

The segment operates home center stores such as "Home Center Musashi," "VIVA Home," "Musashi Pro," and "NICO PET" as its core business, alongside the arts & crafts specialty store "Ark Oasis," home renovation services "Ark Home" and "Fresh House," the pet specialty store "P's-first," and the food FC "Lopia." It provides a wide range of home-related products, household goods, food, and other items to both general consumers and professional (trade) customers, serving as the core business accounting for 77.5% (FY2026, ending February 2026) of the Group's consolidated operating revenue. The number of home center stores stood at 141 at the end of FY2026 (ending February 2026).

Recent Overview

Sales expanded 8.4%, but rising costs caused operating profit to decline 19.1%, worsening profitability.

In FY2026 (ending February 2026), net sales and operating revenue of the retail business expanded to ¥276,722 million (up 8.4% year on year), but operating profit fell significantly to ¥4,496 million (down 19.1% year on year). Profit was squeezed by new store opening costs, increased sales commissions accompanying the rising proportion of credit card and QR code payments, rising labor unit costs, and increased utility costs. The pet division expanded sharply by 47.5% due to making Pets First Holdings a wholly owned subsidiary (June 2025), increasing goodwill and trademark rights. Existing store sales fell below the prior year in December and February (due to weather and precipitation effects), while January was strong at 103.6%.

Key Products

Growth Drivers

• Significant expansion of the pet division (up 47.5% year on year) and expanded synergies through making Pets First Holdings Co., Ltd. a wholly owned subsidiary (June 2025)
• Growth in renovation services (up 21.9% year on year) through making Fresh House a wholly owned subsidiary (July 2024)
• Expansion of sales scale through new store openings (3 stores opened in FY2026, 141 stores at period-end)
• Solid performance of car and leisure goods, and steady trends in building materials, DIY goods, household goods, and gardening supplies
• Strengthening of customer base through the launch of the new membership program ACPO (FY2027 initiative)
• Improvement in overall facility drawing power through Lopia (FC) expansion and attraction of specialty stores (FY2027 initiative)
• Profitability improvement through the "Best Single Item" strategy and building a low-cost structure (FY2027 initiative)

Risks

• Decline in profit margin due to rising costs of new store openings (increases in fixed costs such as labor, utilities, and sales commissions)
• Increased operating costs from the continued rise in labor unit costs
• Increased sales commissions accompanying the rising proportion of credit card and QR code payments
• Risk of fluctuation in sales of seasonal goods (gardening, snow removal-related, etc.) due to unusual weather and temperature changes
• Deterioration of the market environment due to intensifying competition and industry consolidation in the home center industry
• Future amortization burden and impairment risk from increased goodwill and trademark rights associated with making Pets First Holdings a subsidiary
• Risk of demand decline due to more cautious personal consumption and weak real wages amid continued price increases