UORIKI CO.,LTD. Q4 FY2025 earnings call

Basic Strategy & Environmental Stance

• Amid persistent fish price inflation and rising costs, management aims to build a positive spiral of value by appropriately returning profits to shareholders, customers, and employees, to secure talent, strengthen competitive advantages, and increase corporate value.
• Five core strategic pillars: (1) Procurement & sales strategy that preserves Uoriki's operating practices and adapts to market changes; (2) Talent strategy focused on improving productivity, developing talent, and ensuring workforce diversity; (3) Wholesale & overseas strategy to expand sales channels globally and spread Japanese fish cuisine culture; (4) Environmental strategy to contribute to solving global environmental problems; (5) Financial strategy focused on stable shareholder returns to increase shareholder value.

Organizational & Procurement Improvements

• Established a new Product Control Headquarters, spinning off the procurement division from the former sales control headquarters to strengthen procurement capabilities amid rising fish prices and tightening supply.
• Key procurement priorities: Stable access to seasonal fresh fish at Toyosu Market; stronger relationships with production regions and fishing ports; increased direct procurement from manufacturers to develop private brand products; logistics reform to cut costs amid 2024 trucking industry challenges; strategic negotiations with suppliers; expanded overseas procurement via joint work with trading houses and on-the-ground buying; increased buyer headcount to execute these priorities.
• A new partnership with JR Japan leverages Shinkansen logistics to sell same-day morning-caught local fish at Uoriki stores.

Sales & Store Development

• The sales control headquarters now focuses exclusively on sales strategy, with priorities including improving customer service, sales capabilities, standardized product quality, expanding in-store sushi and fresh sashimi offerings (for convenience to younger customers), developing region-specific assortments, and expanding product mix to increase average transaction value.
• Store development strategy prioritizes profitable, high-growth locations, continuing a scrap-and-build approach to exit low-profitability locations even if they are currently profitable, to build a leaner store network. The company is targeting entry into new regions and new core-related business formats (such as seafood restaurants).
• Two new stores opened in February and March 2025 in Fukuoka (Uoriki's first entry into Kyushu region), with sales currently tracking well.

M&A & Subsidiary Integration

• Acquired a 55.76% stake in Mogami Sengyo, converting it from an equity method affiliate to a consolidated subsidiary. Mogami Sengyo operates ~50 fresh fish stores focused on the Kyushu and Chugoku regions.
• Priorities for integration: Establish Uoriki-standard governance, build a lean store network (with scrap-and-build and exit of unprofitable locations), and grow via talent exchanges and management cooperation between the two firms.

Talent Management

• Recruitment has been strong: 94 new graduates and 147 mid-career hires have been hired in the last 5 years, with many mid-career hires coming from peer seafood companies and providing immediate capacity. Consistent wage increases and overtime reduction have improved recruitment outcomes, alongside the company's stable profitability.
• Talent development is centered on the legacy principle of

1. Retail (Uoriki core segment): Revenue grew 2.8% year-over-year to 908 million yen, with existing store sales up 2.5% YoY. Gross profit increased from revenue growth, but was partially offset by a decline in gross profit margin. Revenue contribution accounts for the majority of consolidated revenue. 2. Wholesale (Uoriki Shoji segment): Revenue decreased 12.6% YoY to negative 523 million yen (a 5.23 billion yen decline from prior year). The decline was driven by lower exports to the US (due to reduced catch volumes of some fish species) and a full-year drop in exports to Hong Kong (impacted by Japanese seafood import restrictions). Uoriki Shoji also saw both reduced revenue and a lower gross profit margin. Consolidated total revenue was 36.629 billion yen, up 0.8% YoY; consolidated gross profit was 14.862 billion yen, up 1.5% YoY; consolidated operating profit was 1.493 billion yen, down 5.6% YoY; consolidated ordinary profit was 2.082 billion yen, up 2.1% YoY; consolidated net income was 1.593 billion yen, up 17.1% YoY.

Business depends on people

, question_and_answer:

Q: How does Uoriki support work-life balance and positive workplace relations to retain talent, a major challenge for peer seafood departments? How do you address issues like difficulty taking continuous leave and tense workplace relationships? / A: Uoriki offers over 120 annual days off including special summer and winter leave, with up to 8 consecutive days off in summer and 5 in winter. Management requires full leave consumption, and HR and sales leadership build leave into operational schedules to ensure employees can take time off. For workplace conflict, the company enforces strict reporting protocols, has an internal hotline for issues, and sends senior leadership to the site immediately to resolve conflicts. New mid-career hires receive headquarter training to align with Uoriki's culture and values, and the company maintains a much faster, higher resolution rate for workplace issues than industry peers, leading to positive feedback from new hires.

Q: What is the planned market positioning and business separation between Uoriki core operations and newly consolidated Mogami Sengyo? / A: (Answer not fully provided in the available transcript)