DELICA FOODS HOLDINGS CO.,LTD. Q2 FY2026 earnings call

• Core Business Overview • Delica Foods HD is a fruit and vegetable processing and distribution company that mainly supplies whole vegetables and cut vegetables to food service companies and home-meal replacement (takeout side dish, bento, etc.) manufacturers. • The company combines processing and low-temperature management for fresh vegetables, which are prone to specification variation and freshness degradation, to deliver value by reducing pre-processing burdens and cutting waste loss for customers. • Major customers include large national food service chains such as Saizeriya, Gusto and Bamiyan (Skylark Group), Yoshinoya, Matsuya, and McDonald's Japan.
• Core Competitive Strength • The company's core competitive advantage is its distribution network that reaches approximately 30,000 stores nationwide through 19 domestic facilities and a network of partner companies. • Its logistics subsidiary operates a 365-day chilled delivery network with over 140 trucks and approximately 200 drivers, which creates differentiation from competing companies.
• Profitability Improvement • Higher processing ratios directly translate to improved unit pricing and profitability for the company. In the accumulated second quarter period of the 2026 March fiscal year, the company's gross profit margin improved to 26.6% from 23.5% in the same period of the prior year, driven by procurement optimization and inventory/waste loss reduction.
• Long-Term Growth Driver • Growing demand for pre-processed ingredients driven by labor saving trends in food service and home-meal replacement sites is the company's medium- to long-term growth driver. • Recent improvement in the food service industry performance (the Japan Food Service Association reported same-store sales for December 2025 were 106% of the same month the prior year) may lead to further expansion in demand for outsourcing processing, driven by persistent labor shortages at store locations. • Medium- to long-term changes in the product revenue mix (toward higher cut vegetable share) are a key point to watch for future growth.

For the full 2025 March fiscal year: 1. Fruit and Vegetable Business: Approximately 57.8 billion yen in revenue, accounting for approximately 98% of total company revenue. Within this business segment, for the first half of the 2026 March fiscal year, cut vegetables accounted for 43.2% of product-based revenue, and whole (unprocessed) vegetables accounted for 39.8% of product-based revenue. 2. Logistics Business: Approximately 0.85 billion yen in revenue, accounting for approximately 1.4% of total company revenue. 3. Research and Development Business: Approximately 0.08 billion yen in revenue, accounting for approximately 0.1% of total company revenue.

No explicit full-year financial guidance (revisions or maintained targets) is provided in the available content. The only forward-looking note states that the ability to replicate the 26.6% gross profit margin achieved in the first half of the 2026 March fiscal year during the second half is the key factor determining the achievement probability of the full-year forecast.

• The nature of the fresh vegetable business means gross profit margins remain prone to volatility if vegetable procurement conditions are disrupted by bad weather or market price fluctuations. • The key uncertainty for the full-year 2026 March fiscal year performance is whether the improved gross profit margin achieved in the first half can be replicated in the second half under potential weather-related supply disruptions.

No formal question and answer section from the earning call is included in the available transcript.