Financial Review
During the first quarter of the current consolidated fiscal year, the Japanese economy showed a gradual recovery in consumer trends due to an improvement in the income environment caused by factors such as rising employment conditions and wages. However, the business environment remains uncertain due to factors such as a slowdown in consumer confidence caused by continued price increases and increasing geopolitical risks.
In this environment, the Group has worked to promote the exciting experience of food both domestically and internationally by implementing a high-value-added product strategy and improving brand value. It has also worked to increase the satisfaction of store employees and develop and retain human resources.
As a result, sales revenue reached 69,862 million yen (up 6.1% year on year), the highest ever for a first quarter consolidated accounting period, and also the highest ever for both the Marugame Seimen segment and the Domestic Others segment. The Marugame Seimen segment and the Domestic Others segment saw increased revenue due to favorable performance at existing stores and contributions from new stores. Meanwhile, the Overseas Business segment saw a decrease in revenue due to factors including the franchising of the Marugame UK business implemented in the previous fiscal year and the closure of some unprofitable stores.
Normalized operating profit (Note 1) was 6,367 million yen (up 44.0% year on year), the same as revenue, the highest ever for a first quarter consolidated accounting period, and the highest ever for all segments. The Marugame Seimen segment and the Domestic Others segment increased profits by absorbing increases in raw material costs and labor costs with increased sales. The Overseas Business segment saw an increase in profits, despite the continued impact of worsening market conditions in some regions, due to the contribution of the strong performance of the Marugame Asia business and improved profits following the franchising of the Marugame UK business.
In addition, other operating income was 2,169 million yen due to the recording of insurance payments related to store closure compensation (due to the COVID-19 pandemic) at overseas subsidiaries, as well as gains on lease cancellations due to store closures. As a result, operating profit (Note 2) increased to 8,052 million yen (up 128.9% year on year), and profit attributable to owners of the parent also increased to 4,393 million yen (up 190.3% year on year).
(Note 1) Business profit: Sales revenue - Cost of sales - Selling, general and administrative expenses
(Note 2) Operating profit: Business profit - impairment loss + other operating income - other operating expenses
Performance by Segment
In the Marugame Seimen segment, we are working to further improve our brand power and customer experience value in order to continue to be chosen by customers. We are implementing various initiatives to increase the number of "Marugame fans" by combining branding and product promotions, deploying hybrid tactics that aim for synergistic effects, creating spaces that appeal to the five senses and allow customers to experience the story of our noodle factory, and pursuing deliciousness through the noodle craftsmen (Note 5) employed at all stores.
In April of this year, the dashi stock was renewed, further enhancing the sweetness of the wheat in the freshly made udon noodles, resulting in a delicious flavor.
As for seasonal fair items, four varieties of the popular "Tomato and Egg Curry Udon" were released simultaneously this year, celebrating its fifth year on April 22nd. In particular, the new "Beef Cutlet, Tomato, and Egg Curry Udon" has received a great response for its combination of freshly fried large beef cutlet and spicy tomato and egg curry.
Starting May 9th, we expanded the number of free condiments and toppings available from six to eight. We have newly started offering "seaweed" and "spicy chili oil," which have been well received by a wide range of customers, allowing customers to "create their own bowl" by freely adding their favorite condiments and toppings.
The summer staple "Onioroshi Bukkake Udon," which was introduced on June 10th, has been sold in three varieties this year, satisfying both "refreshing" and "hearty" tastes, with 1.81 million servings sold by the end of June. Fair products also performed well, significantly exceeding the same period last year.
Additionally, three new flavors were introduced in April for the "Marugame Udonuts" that have been on sale since last year, with the "Strawberry Milk Flavor" in particular being a huge hit, especially among female customers, as it can be enjoyed with a dipping sauce for a rich taste. Furthermore, on June 24th, a new product was released to meet new snacking needs: "Marugame Shake Pippi," a deep-fried udon snack made with chewy udon noodles. The pleasantly crispy texture and the fun of choosing your favorite flavor from a total of three options and shaking it up to finish it off have been extremely well-received by many customers, with cumulative sales exceeding one million units in the 20 days since its release.
As a result of these efforts, revenue reached million yen (up 11.1% year on year), a record high for a first quarter consolidated accounting period. Although raw material costs, labor costs, and utility costs increased, these were absorbed by increased revenue, and core operating profit also increased significantly to million yen (up 18.1% year on year), a record high for a first quarter consolidated accounting period, with the core operating profit margin also reaching a record high of 19.1%.
(Note 5) Noodle craftsman: A specialist who makes ideal udon noodles, developed through Marugame Seimen's unique human resource development system.
The Domestic Others segment includes Kona's Coffee, Zundoya, Meat Yamagyu, Banbaiya, Tempura Makino, Tori Doll, Ton-ya Ton-ichi, Nagata Honjoken, and Baked Koppe Bakery.
Kona's Coffee, which operates under the concept of "the closest Hawaii," is accelerating its store openings, opening its Niiza store in Saitama Prefecture on April 10th. The company's first store in Tochigi Prefecture, the Utsunomiya store, opened on April 30th, boasting the largest merchandise sales area to date and a 360-degree hula dance stage, a first for the company. Furthermore, the Nishi-Ogikubo store opened on June 26th as the company's third store within Tokyo's 23 wards, and is taking advantage of the unique locational characteristics of each store, including an expanded alcohol menu that can only be found at stores located near train stations. While store opening costs increased amid favorable store openings, profits increased due to increased sales.
Zundoya, a pork bone ramen chain, opened its Matsusaka store (Mie) on April 25th and its Obu store (Aichi) on May 30th, bringing the total number of stores to 105. Both new and existing stores performed well, with last year's popular "Zundoya-style Chicken White Soup" being offered again for a limited time.
In other business categories, we opened two Tempura Makino stores (including Tendon Makino), two Banbaya stores, and one Yamagyu Nikuno store, all of which performed well.
As a result, revenue reached 9,961 million yen (up 24.1% year on year), the highest ever for a first quarter consolidated accounting period. Store opening expenses were absorbed by the increased revenue, and operating profit also increased to 1,134 million yen (up 10.7% year on year), the highest ever for a first quarter consolidated accounting period.
In the international business segment, revenue decreased due mainly to the impact of the franchising of Marugame's UK business and the strategic closure of unprofitable stores implemented in the previous fiscal year. Operating profit increased due to favorable performance at Marugame Udon, including Taiwan, despite a delayed recovery at Fulham Shore due to the continued deterioration of the UK market.
As a result, revenue was 24,507 million yen (down 5.6% year on year), and business profit increased significantly to 1,139 million yen (up 881.2% year on year), the highest ever for a first quarter consolidated accounting period.
Monthly sales
Consolidated Financial Statements
Earnings Forecast
Consolidated earnings forecast for the fiscal year ending March 2026(April 1, 2025 - March 31, 2026)
million yen (year-on-year change)
sales revenue | 282,000（+5.1％） |
|---|---|
business profit | 19,600（+7.7%） |
Operating income | 1４,600（＋68.3%） |
Profit attributable to owners of the parent company | 5,500（+193.5%） |
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