SUNDRUG CO.,LTD.
9989・Prime Market・Retail Trade
Business
Sundrug Co., Ltd. was founded in 1957 and is a retail group headquartered in Fuchu City, Tokyo. Its core drugstore business operates 1,155 stores (including 886 directly managed stores) focused mainly on pharmaceuticals, cosmetics, and daily necessities, while also running dispensing pharmacy and e-commerce operations. The discount store business, operated by subsidiary Dialax Co., Ltd., offers groceries and household goods at low prices through a network of 439 stores. Combined, the two businesses achieved net sales of ¥842,512 million in FY2026 (ending March 2026), and the company is listed on the Tokyo Stock Exchange Prime Market. Affiliated companies include Kirindo Holdings, and the group is actively involved in industry consolidation.
Business Model
The drugstore business combines pharmaceutical, cosmetics, and daily sundries sales with dispensing pharmacy and e-commerce operations to raise customer spend per visit and visit frequency. The discount store business attracts customers through low-price sales of groceries and household goods, while improving gross margin through better trading terms for drug-related merchandise. Both businesses continue new store openings and renovation investments, adopting a financial management approach centered on internal funding, with operating cash flow (¥43,297 million for FY2026 (ending March 2026)) serving as the main source of investment funds.
Company Strengths
As of the end of FY2026 (ending March 2026), the company operated a total of 1,594 stores, comprising 1,155 stores in the drugstore business and 439 stores in the discount store business. In FY2026 alone, 73 new stores were opened and 79 stores were renovated, and continuous investment in store openings has built a store network of a scale that is difficult for competitors to replicate.
As of the end of FY2026 (ending March 2026), the equity ratio stood at 60.1%, with net assets of ¥286,001 million. Cash flow from operating activities secured ¥43,297 million, maintaining a financial structure in which capital expenditures of ¥28,577 million are funded from internal resources. A financial base that is nearly debt-free serves as a competitive advantage supporting aggressive store openings.
Through a two-pillar structure of the drugstore business (external sales of ¥478,404 million, operating income of ¥27,481 million) and the discount store business (external sales of ¥364,121 million, operating income of ¥19,350 million), the company captures demand from consumers seeking both thrift and health-consciousness. A portfolio that does not depend on a single business format enhances the stability of business performance.
ENVALITH's Perspective
Performance Trend
Revenue expanded roughly 30% over five fiscal years, from ¥648,734 million in FY2022 to ¥842,512 million in FY2026. Operating profit also increased steadily from ¥34,052 million to ¥46,831 million, with operating margin improving slightly to 5.6% (from 5.5% in the prior period). As an external factor, price increases in the food segment—driven by inflation—boosted sales in the discount business, while a decline in seasonal merchandise sales such as cold remedies (a reversal from the prior year's elevated demand) negatively impacted drugstore business sales. For FY2027 (ending March 2027), the company forecasts revenue of ¥876,000 million (up 4.0% year on year) and operating profit of ¥48,800 million (up 4.2% year on year), indicating a continued stable growth trajectory.
Growth Strategy
Pursuing sustainable growth through five pillars: store expansion, e-commerce strengthening, dispensing pharmacy expansion, PB development, and digitalization
In FY2026 (ended March 2026), the company opened 73 new stores, renovated 79 existing stores, and closed 21 stores, expanding the total store count to 1,594 at fiscal year-end. For FY2027 (ending March 2027), the group plans to open 100 new stores in total (68 drugstores, 32 discount stores), with a policy of selecting business formats suited to location characteristics to improve store opening efficiency.
The company continues to strengthen its dispensing pharmacy business to capture growing prescription demand driven by the declining birthrate and aging population. In FY2026 (ended March 2026), the dispensing pharmacy business also performed well, contributing to sales growth in the drugstore business. The expansion of this business remains a core growth initiative for the next fiscal year as well.
The company is strengthening its e-commerce business in response to changes in consumer purchasing behavior. In FY2026 (ended March 2026), the e-commerce business continued to perform well, contributing to sales growth in the drugstore business. The company plans to continue its expansion policy in the next fiscal year and pursue synergies with physical stores.
The company is promoting the expansion of private brand (PB) products and the development of new categories to improve gross margins and achieve differentiation. Together with improvements in trading terms, it aims for continuous improvement in the gross profit margin. In FY2026 (ended March 2026), the drugstore business achieved a gross margin improvement of 0.2pt and the discount store business achieved 0.3pt.
In response to labor shortages caused by the declining birthrate and aging population, the company is promoting digitalization and labor-saving across various operations. Salaries, allowances, and bonuses increased to ¥62,654 million (from ¥58,216 million in the previous fiscal year), making productivity improvement an urgent priority in the face of rising labor cost pressures. The company is also concurrently promoting environmental management initiatives.
Last updated: July 19, 2026