YOMEISHU SEIZO CO.,LTD. Q4 FY2025 earnings call

• Overall Financial Performance

  • Total company net sales were 10.017 billion yen, a 2.2% decrease year-over-year; operating profit was 128 million yen, a 72.9% decrease YoY, driven by upfront investment for Kurasuwa no Mori opening, reduced gross profit from lower sales, and higher cost of goods sold, partially offset by 318 million yen in cost savings. Ordinary profit was 626 million yen, a 34% decrease YoY; net income was 679 million yen, a 28.7% decrease YoY, supported by gains from sales of investment securities.
  • Total assets declined 898 million yen to 53.518 billion yen, driven by a 1.485 billion yen reduction in investment securities from share sales and a 1.944 billion yen reduction in cash and deposits, partially offset by a 2.452 billion yen increase in tangible fixed assets for Kurasuwa no Mori. Total liabilities declined 318 million yen to 7.456 billion yen, and total net assets declined 580 million yen to 46.062 billion yen.
  • Net cash from operating activities was 473 million yen, down YoY due to lower ordinary profit and higher consumption tax payments for Kurasuwa no Mori construction. Net cash used in investing activities was 1.194 billion yen, primarily for Kurasuwa no Mori construction fixed asset purchases. Net cash used in financing activities was 623 million yen, primarily for dividend payments. Ending cash and cash equivalents balance was 3.05 billion yen, down 1.344 billion yen YoY.

• Operational Updates

  • Yomeishu Related Business: Ran multi-channel promotions (TV commercials with Masao Kusakari, newspaper, web ads), strengthened in-store displays with wholesalers and drug stores, and expanded distribution to dispensing pharmacies, but sales declined due to pressure from rising prices on consumer spending. Launched a new liqueur product "Houjun Zakuro-shu" in March 2025, focused on high-growth products like craft gin and Yomeishu Seizo Kuromoji throat lozenge, and implemented cost and sales efficiency improvements. Closed the Taipei branch in March 2025 after underperforming against opening targets, but will continue brand building and market development in Taiwan through strategic product policy. Started exporting Goyokoku to Hong Kong and expanded craft gin exports to markets including Australia.
  • Kurasuwa Related Business: Held the grand opening of the Kurasuwa no Mori experiential facility in October 2024, which has received over 120,000 visitors to date and received positive market feedback. Opened 3 new bakery-focused stores in Tokyo, with the Jinbo-cho store opening in March 2025 doubling as a central kitchen to strengthen bakery production. Launched new direct-to-consumer exclusive products (onion and burdock beef tendon curry, aromatic mellow plum wine) and expanded sales through new external clients including Japan Post office retail channels.

• Mid-term Management Plan Strategy

  • The plan's core strategy is "growth investment for the next 100 years and establishment of a sustainable growth base", pursuing ambidextrous management: deepening existing business centered on Yomeishu and alcohol/food wholesale while exploring new business, pursuing growth investment while maintaining profitability to create new corporate value.

1. Yomeishu Related Business: Total revenue was 8.541 billion yen, a 6.4% decrease year-over-year, contributing 85.3% of total company revenue. Breakdown: Domestic Yomeishu revenue was 7.004 billion yen, a 6.1% decrease YoY; Alcohol and food revenue was 845 million yen, a 0.9% decrease YoY; Overseas revenue was 321 million yen, a 25.6% decrease YoY. 2. Kurasuwa Related Business: Total revenue was 1.476 billion yen, a 31.7% increase year-over-year, contributing 14.7% of total company revenue. Growth was driven by the grand opening of Kurasuwa no Mori and 3 new bakery store openings in Tokyo.

• 2026 March Fiscal Year Full-Year Forecast: Total net sales are projected to be 10.51 billion yen, a 4.9% increase YoY. Operating profit is projected to be 530 million yen, a 313.1% increase YoY; ordinary profit is projected to be 1.04 billion yen, a 65.9% increase YoY; net income is projected to be 1.07 billion yen, a 57.4% increase YoY.
• 2026 Segment Forecast: Yomeishu Related Business is projected to reach 8.79 billion yen, a 0.3% increase YoY (domestic Yomeishu flat YoY at 7.006 billion yen, alcohol and food up 1.8% to 1.088 billion yen, overseas down 4.3% to 307 million yen, real estate rental and solar power up 4.5% to 387 million yen); Kurasuwa Related Business is projected to reach 1.72 billion yen, a 37.4% increase YoY following a segment restructure that moved external third-party sales into Yomeishu Related Business' alcohol and food segment.
• Mid-term Management Plan (April 2022 - March 2027) Target Revision: The original 200 billion yen+ final year sales target has been withdrawn due to changed market conditions, but the existing targets of 10% operating margin and 4% ROE remain unchanged.
• ROE Target: The company aims to restore ROE to above shareholder cost of capital as soon as possible, with a first-step target of 4% ROE by the final mid-term plan year (March 2027), with further improvements planned after this baseline is achieved.
• Kurasuwa no Mori Target: The company targets reaching 300,000 annual visitors by March 2027.

• Weak domestic Yomeishu sales due to the impact of rising consumer prices on spending behavior
• Intensifying competition in the direct-to-consumer e-commerce channel
• Delays in Kurasuwa Related Business expansion due to difficulties securing human resources for new store development
• Changed underlying market and business scale assumptions from when the mid-term management plan was originally developed, including lower-than-expected M&A deal viability for the final plan year
• Sustained PBR below 1.0x driven by ROE remaining below shareholder cost of capital, caused by a mismatch between declining profitability from Yomeishu sales weakness and growing equity capital
• Underperformance of the Taipei branch against original opening expectations, leading to its full closure in March 2025

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