HURXLEY CORPORATION Q2 FY2026 earnings call

• Mid-Term Strategic Goals (ending FY28 March)

  • Core goal: Achieve sustained growth, improve corporate value, strengthen profitability to resolve the company's price-to-book ratio (PBR) trading below 1.0x as early as possible.
  • Targeted metrics: 8.3% ROE (up from 6.9% in FY24 March), 72.0 billion yen consolidated revenue, and 5.6 billion yen EBITDA by FY28 end.
  • Total planned investment: 17.8 billion yen, consisting of 12.0 billion yen for M&A and 5.8 billion yen for capital expenditure, focused primarily on the Logistics & Food Processing segment.
  • Investment priority: Expand into new food-related areas including food manufacturing, frozen food manufacturing, and confectionery manufacturing that generate synergy with existing operations.

• Recent Strategic M&A & Growth Actions

  • Hosoya Corporation, the number one player in Japan's chilled shumai market known for its popular product "Showa-era Born Luxury Shumai", joined the Harkslay Group in December 2024 and has been consolidated starting from Q4 FY25 March.
  • The acquisition is intended to build a strong position in the steadily growing prepared side dish market. The company will continue pursuing active growth via both M&A and business partnerships.

• H1 Operational Highlights

  • H1 2026 results beat the prior published earnings forecast, with all of revenue, operating profit, and ordinary profit reaching the highest level for any first half in the past 5 years, with ordinary profit and net interim profit significantly outperforming forecast.
  • Prepared Meal Business: Profit growth driven by improved brand recognition for Hokka Hokka Tei, active customer-facing promotions, and solid results from the catering division's business partnership with TKP.
  • Store Asset & Solution Business: Growth supported by increased stable recurring revenue from higher operating store counts and a one-off gain from the sale of one real estate property. The TRUNK Akihabara commercial building, fully developed in-house by TRN Group, was completed and held its grand opening on August 30, 2025.
  • Logistics & Food Processing Business: Strong revenue growth driven by increased sales across all divisions and the consolidation of Hosoya Corporation. Existing products like Crazy Salt Nuts continue to sell well, and commissary utilization rates have risen amid ongoing labor shortages at supermarkets.
  • Company-wide participation: Harkslay sponsored and exhibited at the Osaka Healthcare Pavilion at the Osaka-Kansai World Expo, running promotional activities including exclusive Expo menu sales at the venue, delivery for exhibitors, and special Expo commemorative bento sales at regular stores.

1. Prepared Meal (Chushoku) Business: Revenue of 8.64 billion yen, up 3.5% year-over-year (YoY), contributing 33.8% of total consolidated H1 revenue. Turned around from a 119 million yen operating loss YoY to a 154 million yen operating profit, marking four consecutive quarters of profit starting from Q3 FY25. 2. Store Asset & Solution Business: Revenue of 6.378 billion yen, up 4.7% YoY, contributing 25% of total consolidated H1 revenue. Operating profit of 969 million yen, up 1.8% YoY, delivering both revenue and profit growth. 3. Logistics & Food Processing Business: Revenue of 11.764 billion yen, up 49.9% YoY, contributing 46.1% of total consolidated H1 revenue. Operating profit of 272 million yen, down 42.7% YoY, with the decline driven by increased goodwill amortization from the recent acquisition of Hosoya Corporation. Total consolidated H1 revenue is 25.525 billion yen, with total segment revenue summing to 26.782 billion yen (the discrepancy is not explained in the transcript).

• Full-year FY26 (ending March 2026) earnings guidance is maintained unchanged from the previous forecast published on May 14, 2025: 52.7 billion yen revenue, 1.9 billion yen operating profit, 1.6 billion yen ordinary profit, and 1.0 billion yen net profit. Any necessary future adjustments will be announced promptly if required.
• Any gains from future real estate sales are not included in the current full-year earnings guidance.
• The annual dividend forecast is maintained at 28 yen per share, a 2 yen increase from the prior year, marking consecutive annual dividend increases starting from FY22 March.

• Management notes there are many uncertain factors surrounding future economic and business trends that create uncertainty around full-year performance.
• The Logistics & Food Processing segment experienced a material YoY decline in operating profit in H1 due to goodwill amortization from the recent Hosoya Corporation acquisition, representing near-term profitability headwind from the company's active M&A strategy.

No Q&A section was included in the provided transcript.