2708.T

Overall Consolidated Financial Results

• The 2nd quarter of FY2026 March term delivered 36.139 billion yen in consolidated revenue (8.1% increase year-over-year), 0.986 billion yen in operating profit (33.8% increase year-over-year), 1.066 billion yen in ordinary profit, and 0.71 billion yen in net income attributable to parent company shareholders. Gross profit margin improved 0.7 percentage points year-over-year to 23.4%.
• The total net increase in revenue of 2.705 billion yen came from 1.794 billion yen from existing customer sales growth and price adjustments for rising raw material costs, plus 1.155 billion yen from new customer development, export growth, and focused product sales, partially offset by a 0.244 billion yen decline from customer store closures.

Long-term and Mid-term Strategic Direction

• Kuze will celebrate its 100th founding anniversary in FY2035 March term, with a long-term management theme of "Sustainable, Qualitative Growth". FY2026 March term is the final year of the mid-term plan's Phase 1, themed "Restart for Growth", with Phase 2 currently under development and scheduled for future publication.
• Phase 1's three core strategies are:
  • Kanto Concentration: Concentrate management resources and advance regional focus in the Kanto region, where the company has built its founding base. In October 2025, the company acquired Saito Shogyo's commercial food wholesale business in Chiba Prefecture to expand regional coverage.
  • Function Strengthening: Develop services such as the KUZEX platform and EC logistics contracting to improve customer convenience and internal productivity/efficiency.
  • Plus-on Strategy: Provide high-value products and information to help customers solve challenges including value growth, profit improvement, and labor shortage resolution.
• The company is prioritizing growth in three core markets: food service, tourism and leisure, and ready-to-eat side dishes, to accumulate channel expertise, strengthen customer relationships in the Kanto/Greater Tokyo Area, balance the business portfolio, and solidify the business foundation.

2026 Fiscal Year Operational Initiatives

• DX and Operational Reform: Advanced operation transformation and digitalization through the "Business Reform Project 2025", and received official DX Certification from Japan's Ministry of Economy, Trade and Industry in November 2025.
• EC and Logistics Contracting: Continued expansion of frozen food third-party logistics for e-commerce, advanced collaboration with major platform partners, and launched the new in-house EC site "ProDepo" in November 2025.
• Logistics Restructuring: Optimized the logistics network via the logistics strategy planning project, and is conducting pilot tests for new distribution center operations.
• Human Resources Initiatives: Implemented a base salary increase for the first half of the fiscal year (following the prior year's increase), and expanded HR systems to support diverse work styles, improved benefits, and increased female workforce participation.
• Strategic Investment: Has developed investment plans for priority growth areas: human resources, logistics, and information systems, and is advancing 5 core future-focused initiatives: EC business, DX promotion, product development, overseas business, and group synergy.

• Management maintains the full-year FY2026 March term consolidated earnings guidance initially announced on May 15, 2025, with no upward or downward revision, due to ongoing uncertainty about external conditions and upcoming costs related to logistics base restructuring. Management will issue an updated forecast once the outlook becomes clearer.
• The maintained full-year guidance is: 71.0 billion yen in consolidated revenue, 1.92 billion yen in operating profit, 1.95 billion yen in ordinary profit, and 1.25 billion yen in net income attributable to parent company shareholders.
• For shareholder returns, the company has consolidated its prior two-tier structure (ordinary + special dividend) into a single ordinary dividend structure for FY2026 March term, targeting a payout ratio of 10% to 15%. The full-year dividend forecast is set at 42 yen per share.

1. Food Ingredients Wholesale Business: Revenue of 32.985 billion yen, operating profit of 1.302 billion yen. This segment contributes approximately 91.3% of total consolidated revenue. 2. Food Ingredients Manufacturing Business: Revenue of 3.085 billion yen, operating profit of 0.316 billion yen. This segment contributes approximately 8.5% of total consolidated revenue.

• The Japanese economic outlook remains uncertain: Potential impacts of Trump-era tariffs on export-focused industries (especially the automotive sector) and sustained rapid price increases could lead to stagnant personal consumption, which would negatively impact the company's core out-of-home and ready-to-eat food markets.
• Ongoing industry-wide challenges: Sustained increases across all cost categories including raw material procurement costs and labor costs, coupled with deepening labor shortages across the food sector, put pressure on profitability and operations.
• Uncertainty related to internal initiatives: The company's planned logistics hub redevelopment and restructuring will require additional unbudgeted expenses, creating further uncertainty for full-year profitability.

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