HitoMile Co.,Ltd. Q4 FY2025 earnings call

Overall 2025 Full-Year Performance

• Consolidated revenue hit a record high at 134.514 billion yen, +3.9% year-over-year, driven by strong demand from core restaurant clients. Gross profit reached 31.065 billion yen (+5.2% YoY), with gross margin improving 0.3pp to 23.1%, due to price increases and expanded private brand (PB) offerings. The business reported lower profits across all post-operating income lines, resulting from a 9.8% YoY increase in selling, general and administrative expenses (SG&A), primarily driven by higher labor costs.
• SG&A increased by 2.617 billion yen YoY, with 1.943 billion yen of the increase coming from higher labor costs, which stemmed from expanding delivery headcount and base pay raises in preparation for business restructuring. Additional increases came from higher depreciation due to increased asset retirement obligations from higher restoration work costs.

1. Time Zone Delivery Business: Revenue of 78.986 billion yen, +6.2% year-over-year; Operating profit of 1.646 billion yen, -27.2% year-over-year. This segment accounts for 58.7% of total consolidated revenue. 2. Route Delivery Business: Revenue of 38.385 billion yen, +6% year-over-year; Operating profit of 0.857 billion yen, +3.3% year-over-year. This segment accounts for 28.5% of total consolidated revenue. 3. In-Store Retail Business: Revenue of 15.526 billion yen, -6.2% year-over-year; Operating profit of 0.644 billion yen, -14.2% year-over-year. This segment accounts for 11.5% of total consolidated revenue.

• 2026 March Full-Year Guidance: Management forecasts consolidated revenue of 142 billion yen, operating profit of 1.44 billion yen, ordinary profit of 1.4 billion yen, and net income attributable to parent shareholders of 0.5 billion yen. This forecast calls for increased revenue but decreased profit overall, as 2026 is the first year of business restructuring and investments will be upfront, even as existing business lines are projected to deliver both revenue and profit growth.
• Dividend Guidance: The company updated its dividend policy to a progressive dividend policy starting from the 2026 March fiscal year, aligned with long-term profit growth from business restructuring. It will maintain its prior dividend level for 2026, in line with the forecast of increased revenue but decreased profit.
• Medium-Term (TRANSFORMATION PLAN 2028) Guidance: The 3-year plan focuses on infrastructure buildout, with a target of 170 billion yen in consolidated revenue and 4 billion yen in operating profit by the 2028 March fiscal year. It targets 230 billion yen in revenue by the 2030 March fiscal year. Total planned investment for business restructuring over the 3-year plan is 3.5 billion yen. The progressive dividend policy will be maintained over the medium term, with dividend growth aligned with profit growth.

• The company faces a long-term structural headwind from a declining drinking-age population, which creates a challenging external operating environment for its core liquor sales business.
• Upfront investments required for the multi-year business restructuring plan will pressure near-term profitability, leading to forecasted lower profits in 2026 fiscal year.
• Higher input and labor costs have pressured profitability in the 2025 fiscal year, and may continue to impact margins through the restructuring period.
• In-store retail sales have already seen customer churn due to broader price inflation, leading to year-over-year revenue declines for the segment.

Q: What types of products does management expect to handle through the new third-party parcel delivery service?

A: Management gained third-party delivery permits and operational know-how through the 2024 acquisition of Yamato Kyuso. It will integrate this capability into the company’s existing last-mile delivery network in Tokyo’s 23 wards, primarily focusing on products that align with the company’s core same-day/immediate delivery value proposition. Priority will be placed on high-demand, time-sensitive goods that complement the company’s existing customer base of restaurants and residential consumers, to leverage existing delivery routes and drive incremental revenue without major additional capacity costs.

Q: What is the implementation timeline and rollout plan for the new medium-term transformation plan?

A: The first three years of the plan (2025–2028) are dedicated to infrastructure development, including internal restructuring, platform building, capacity expansion, and initial M&A activity. The company will move gradually to test new service offerings, refine operations, and scale successful initiatives, with significant revenue and profit growth targeted after the initial infrastructure buildout phase. The company will update the market on progress quarterly in line with its regular earnings reporting cycle.

Q: How will the business restructuring impact the company’s existing e-commerce (EC) operations?

A: The business restructuring will strengthen rather than disrupt existing EC operations. The company’s newly built platform will integrate EC sales for both internal and external products, expanding the product assortment available to existing EC customers. The improved delivery capacity from restructuring will also enable faster delivery for EC orders, which is a key competitive differentiator compared to standard next-day delivery offered by most EC providers. This is expected to drive higher user growth and conversion for the EC business, building on the 27% user growth seen after the 2024 EC app renewal.