ARCS COMPANY,LIMITED
9948・Prime Market・Retail Trade
Retail-related business (single segment)
A single business segment operated by a food supermarket holding company group based in Hokkaido and Tohoku
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales (cumulative Q1) | ¥158,479 million | ¥154,294 million | ↑ |
| Operating income (cumulative Q1) | ¥4,104 million | ¥3,874 million | ↑ |
| Operating margin (cumulative Q1) | 2.6% | 2.5% | ↑ |
| Ordinary income (cumulative Q1) | ¥4,472 million | ¥4,233 million | ↑ |
| Quarterly net income attributable to owners of parent | ¥2,881 million | ¥2,798 million | ↑ |
| Gross margin (cumulative Q1) | 24.8% | 25.0% | ↓ |
| Equity ratio | 64.7% | 65.2% | ↓ |
| Total assets | ¥302,876 million | ¥300,714 million | ↑ |
| Net assets | ¥195,918 million | ¥196,142 million | ↓ |
| Full-year net sales forecast | ¥648,000 million | ¥626,957 million | ↑ |
| Full-year operating income forecast | ¥18,000 million | ¥17,632 million | ↑ |
Business Details
Arcs Co., Ltd. operates as a pure holding company, with food supermarket operating companies including Ralse Co., Ltd., Universe Co., Ltd., and Belljoyce Co., Ltd. as its core, alongside retail-related businesses spanning home centers, prepared food (delicatessen) manufacturing, and food wholesale. As of the end of the first quarter of FY2027 (ending February 2027), the group operated 374 stores, forming a regionally rooted dominant area presence in Hokkaido and Tohoku. Its basic policy centers on offering products at "newly convincing prices" (shin-nattoku kakaku), fulfilling its role as a lifeline for local communities.
Recent Overview
In the first quarter of FY2027 (ending February 2027), both sales and profit at every stage increased, with no revision to the full-year forecast
Net sales for the first quarter of FY2027 (ending February 2027) (March to May 2026) reached a record high of ¥158,479 million (up 2.7% year on year). Against the backdrop of a 2.3% year-on-year increase in average per-item prices due to inflation, existing store average customer spending rose 1.8% year on year, and existing store customer traffic also increased 0.9% year on year, exceeding the prior-year level for 3 consecutive months. Increased personnel costs from base pay increases (salaries and allowances of ¥15,209 million, up 4.8% year on year) were absorbed through reductions in utility costs and depreciation expenses, resulting in operating income of ¥4,104 million (up 5.9% year on year). Expenditures on intangible fixed assets for the next-generation core system (scheduled to go live in October 2027) increased to ¥1,556 million, and cash outflows from investing activities rose 183.2% year on year to ¥4,931 million. There has been no revision to the full-year earnings forecast (net sales of ¥648,000 million and operating income of ¥18,000 million).
Key Products
Growth Drivers
- Improvement in average customer spending and gross profit through existing store renovations (conversion to the Super Arcs format) (full-year plan for FY2027 (ending February 2027): 3 new store openings and 18 store renovations)
- Effect of rising average per-item prices amid inflation (up 2.3% year on year in the first quarter under review), boosting average customer spending
- Boost to sales from recovery in existing store customer traffic (up year on year for 3 consecutive months in the first quarter under review, up 0.9%)
- Strengthening of earning power through group-wide horizontal deployment of category management and standardized product shelf allocation (including the start of initiatives for processed foods and confectionery at Fukuhara Co., Ltd.)
- Expansion of non-food sales through increased store handling of Cainz original products (up 46 stores from the end of the previous fiscal year to a total of 90 stores)
- Promotion of DX and productivity improvement through the next-generation core system (scheduled to go live in October 2027) and introduction of electronic shelf labels
- Strengthening of the customer base and individual customer retention leveraging the RARA Card (approximately 3.5 million members) and Arcs App (approximately 400,000 members)
- Reduction in product development and procurement costs through collaboration with the three-company alliance (Valor Holdings Co., Ltd. and Retail Partners Co., Ltd.)
Risks
- Downward pressure on the number of items purchased due to prolonged consumer frugality and rising prices (number of items purchased per customer down 0.5% year on year in the first quarter under review)
- Risk of rising petroleum and naphtha-related material prices from the second quarter onward due to continued high energy and raw material costs and heightened tensions in the Middle East
- Risk of rising selling, general and administrative expenses due to increased personnel costs (salaries and allowances of ¥15,209 million) associated with base pay increases
- Intensifying competition across industries and formats (drugstores, discount formats, new market entrants, etc.) affecting existing store sales
- Large-scale IT investment costs associated with the construction of the next-generation core system (scheduled to go live in October 2027) (¥1,556 million in intangible fixed asset acquisition expenditures in the first quarter under review)
- Pressure on profitability from a declining trend in gross margin (24.8% in the first quarter under review versus 25.0% in the same period of the prior year)
- Risk of market contraction in the Hokkaido and Tohoku regions due to the declining birthrate and aging population
- Risk of rising procurement costs for imported ingredients and indirect materials due to yen depreciation and geopolitical risk
Last updated: May 25, 2026