Morinaga & Co.,Ltd. Q3 FY2026 earnings call

• Market Position and Brand Strength

  • As of December 2025, Morinaga holds the number 1 market share in four categories: soft candy, caramel, plain biscuits, and jelly drinks, and holds the number 2 market share in frozen desserts
  • The flagship in Jelly product holds 34.1% market share in the 106.9 billion yen domestic jelly drink market for the period April 2024 to March 2025
  • Four focused growth areas (Frozen Dessert, in Business, Mail Order, U.S. Business) generated total net sales of 113.7 billion yen in fiscal 2025, accounting for 49.7% of total consolidated net sales. The core base confectionery and food business generates stable cash flow that is allocated to these growth areas.

• Recent Strategic Moves

  • On March 6, 2026, Morinaga announced the acquisition of MyMo Holdco, Inc., parent company of My/Mochi, the largest mochi ice manufacturer in the U.S. This acquisition is intended to build a second pillar of overseas growth alongside HI-CHEW within the frozen dessert business.

• Core Growth Themes

  • Near-term growth is supported by the expanding domestic ice market, which hit an all-time high of 64.51 billion yen in fiscal 2024. Unusually hot weather acts as a tailwind for demand for Morinaga's popular frozen dessert products.
  • Long-term growth is focused on the health and wellness category: Morinaga has set a target of transforming into a wellness company by 2030. Health-focused products such as those in the in Business and Mail Order segments see higher rates of repeat purchase, so increasing their revenue share improves overall earnings stability, and the expansion of health-related businesses will impact long-term corporate valuation.

• Shareholder Return Policy

  • The company uses Dividend on Equity (DOE) as the basis for dividend payments, with a long-term policy of increasing the DOE target over time. Current targets are 4.0% for fiscal 2025, 4.3% for fiscal 2027, and 4.5% or higher by 2030.
  • For fiscal 2026 ending March 2026, the annual dividend forecast is 65 yen per share, representing a forecast dividend yield of 2.45% based on the closing price on March 13, 2026.
  • The company also offers a shareholder benefit program: shareholders holding 100 or more shares continuously for at least 6 months as of September 30 each year receive a gift box of Morinaga's own products.

For the full fiscal year ending March 2025, Morinaga & Co., Ltd. reported total consolidated net sales of 228.9 billion yen. Revenue contributions from core product segments are as follows:

1. Confectionery and Food Segment (includes chocolate, biscuits, candy): 36.9% of total consolidated net sales
2. Frozen Dessert Segment (includes Choco Monaka Jumbo, Itachoco Ice): 21.6% of total consolidated net sales
3. in Business Segment (centered on in Jelly): 13.7% of total consolidated net sales
4. U.S. Business Segment (led by HI-CHEW): 9.2% of total consolidated net sales
5. Mail Order Segment (includes products like Oishii Collagen Drink): 4.9% of total consolidated net sales For the cumulative nine months ending December 2025 (third quarter of fiscal year ending March 2026), the company reported consolidated net sales of 181.6 billion yen and consolidated operating profit of 19.6 billion yen.

• For the full fiscal year ending March 2026, management maintains the full-year consolidated guidance of 236.0 billion yen in net sales and 22.3 billion yen in operating profit. Through the first three quarters of the fiscal year, progress against these full-year targets is currently strong.

• Sustained high raw material prices: In fiscal 2025, both the confectionery/food segment and frozen dessert segment achieved net sales growth, but both segments saw a year-over-year decline in operating profit due to the impact of soaring cocoa prices. The company's ability to absorb cost increases through price hikes remains a key uncertainty.
• Intensified competition and weak demand in the U.S. market: The U.S. business continues to face headwinds from inflation-driven soft consumer spending and intensifying market competition.

No question and answer section is included in the provided transcript.