VIA Holdings,Inc. Q2 FY2026 earnings call

• Company Background and Current Footprint

  • Founded in 1948 originally as a printing business, shifted to full-service food and beverage (focused on izakaya) after exiting printing, currently operates 298 total stores (28 franchise, 270 direct-operated) across Japan as of end-September 2025, 55% of stores in eastern Japan and 45% in western Japan, with ~30 total brand concepts.
  • Net store count decreased by 7 stores from prior period end, after closing unprofitable/non-renewed locations; one new prototype 紅とん store opened in October 2025 with strong early results, and another new 紅とん store is scheduled to open in December 2025.

• Overall Same-Store Performance Trends

  • Aggregate same-store sales: 102% of prior year, average check size: 103% of prior year, aggregate customer count: 99% of prior year. Multiple concepts have achieved consecutive year-over-year customer count growth for three years, with performance variation across concepts and regions.
  • Rising costs including raw materials, utilities, labor and logistics have been partially offset by menu adjustments, pricing, and sales initiatives; the largest unplanned cost increase in H1 was ~100 million yen in higher-than-budgeted logistics costs, which directly explains most of the H1 ordinary loss.

• Mid-Term Strategy: Medium-Term Management Plan 2028

  • The plan builds on three years of post-ADR business regeneration (the "Future Plan") that delivered full company return to profitability in FY2024, and introduces the "Future Plan Next" phase focused on a "Strategic Shrinkage Growth Model": amid unavoidable market contraction due to population decline, the company will proactively adjust its store count, while doubling total profit via improved per-store profitability.
  • Three core pillars: 1) Redesign and transition of the profit structure model; 2) Redefinition of concept business models; 3) Evolution of a full human resource activation model.

• Key Operational Initiatives

  1. Logistics Network Restructuring:
     • Consolidated 12 distribution centers across 2 logistics providers to a target of 5 centers with one provider, to address 2024 logistics industry driver hour restrictions and avoid a projected 30%+ future logistics cost increase. As of end-September, 7 centers are operational, with 2 extra centers remaining temporarily, leading to 80 million yen in unplanned extra H1 costs. A final plan to reach 5 centers is nearly finalized, and extra costs will be eliminated in H2; the restructuring already avoided a much larger long-term cost risk.
  2. Capital Structure Improvement:
     • Partnered with new investor GROWTH PARTNERS, replaced the 1.5 billion yen 8.5% dividend yield Class E preferred shares from the ADR regeneration phase with 3% dividend yield new preferred shares, cutting annual capital costs significantly.
     • Total potential capital raising of 3 billion yen (including 1.5 billion yen in share warrants) will be allocated: 400 million yen for new high-profit prototype store openings, ~1.8 billion yen reserved for potential M&A, with flexible allocation to accelerate new store openings if prototypes perform well. M&A is not a priority; the company prefers high-success-probability organic new store development given its lower risk.
  3. New Prototype Store Testing:
     • Sohonke Binchotan Ogiya (Nagoya): Flagship prototype near Nagoya Station focused on "return to roots" high-quality binchotan-grilled yakitori with higher-margin menus. This single store already delivers ~3x the profit of a standard Ogiya store, ranking among the top performing stores in the chain.
     • New Model Akaton (Tokyo): Tested non-ground-floor locations (basement in Iidabashi, 4th floor in Shinjuku) to cut rent costs in high-demand central Tokyo locations, with SNS marketing driving customer discovery. The Iidabashi store already ranks among the top two performing Akaton stores just after opening.
     • Pastel Kitchen Itabashi: Experimental remodel of an existing Western concept location into an all-day dining prototype serving from morning coffee through dinner, adapted to the location adjacent to a cinema. It has delivered over 200% of prior year sales and profit, and will serve as a test bed for Pastel concept evolution.

• Human Resource and Capital Return Priorities

  • Prioritize developing a new lean personnel model that leverages DX for labor savings while preserving and passing down core cooking craft, continue pushing work style reform, and maintain commitments to base salary increases for all employees.
  • Began gradually expanding the shareholder benefit program after returning to profitability, with a target to resume dividend payments as soon as possible, then further improve shareholder returns and benefits.

1. 扇屋 (Yakitori Ogiya): 180 total stores (including franchise), accounts for ~60.4% of total stores and ~75% of the firm's total izakaya footprint. Achieved both operating profit and ordinary profit black ink (positive) in H1, customer count exceeded 100% of prior year, and same-store sales have not fallen below 100% year-over-year in any quarter. It is the firm's core profitable base segment.
2. Pastel: In-shop Western/Italian concept located primarily in large commercial/shopping centers, with menu-focused strategies delivering stable results. Customer traffic is highly sensitive to overall shopping center foot traffic trends, requiring granular location-specific strategies to grow customer count.
3. 日本橋紅とん (Nihonbashi Akaton): ~30 stores exclusively within Tokyo's 23 wards, existing stores are relatively strong. Performance varies by location within the 23 wards, with some stores exceeding prior year customer count significantly and others falling slightly below. Management is focused on market-specific operations to bring all stores above 100% year-over-year customer count.
4. 魚や一丁 (Uoya Ichicho): Scaled back from 16 direct-operated stores pre-COVID to 3 large-format urban stores, retained as benchmark locations to track demand for large-format banqueting. Sales are growing, driven by a gradual recovery in large group banquet demand post-COVID, with rising fish prices offset by increased average customer check size.
   Total company consolidated H1 revenue: 8.76 billion yen, an increase of 20 million yen year-over-year. Total company operating loss: -40 million yen (240 million yen decline year-over-year); ordinary loss: -80 million yen (240 million yen decline year-over-year); net interim loss: -90 million yen after special losses from store closures.

• Full-year FY2026 (ending March 2026) consolidated revenue is projected at 17.5 billion yen, an increase of 126 million yen year-over-year. New store openings are expected to come in below original plan, offsetting expected gains from price adjustments across concepts.
• Full-year operating profit is projected at 100 million yen, and ordinary profit at 20 million yen, representing a ~100 million yen decrease in both metrics year-over-year, reflecting H1 results and lower projected full-year revenue. Full-year net profit is projected at 0 yen.
• Management states the H1 deficit is transitory: 75% of the company's stores are izakaya, which have a strong seasonal skew with most full-year profit generated in H2 (including the peak year-end and New Year holiday period), and the unplanned logistics costs from the restructuring transition will be eliminated in H2. The company still projects a full-year net black ink (positive profit) result.

• Broad industry headwinds: Persistent yen depreciation-driven raw material cost inflation, rising labor costs from minimum wage hikes and widespread industry labor shortages, and increasing rent costs in high-demand urban locations all put pressure on profitability.
• Logistics restructuring transition risk: The delayed consolidation to 5 distribution centers created unplanned additional costs that caused the H1 deficit, though management expects these costs to be fully resolved in H2.
• Demand risk: Aggregate customer traffic has stalled at 99% of prior year, with uneven performance across concepts and regions, requiring ongoing location-specific adjustments to drive growth.
• Large-format banqueting demand uncertainty: Post-COVID consumer behavior shifted away from large group events, forcing the scaling back of Uoya Ichicho, and sustained recovery of large banquet demand remains uncertain.
• Shopping center foot traffic risk: Pastel's performance is dependent on foot traffic at the commercial properties where its stores are located, so weak retail visitation directly hurts the concept's results.
• Demographic risk: Long-term population and working-age population decline in Japan creates unavoidable contraction in the overall dining market, requiring continued structural adjustment to maintain profitability.

No Q&A section is included in the provided earnings call transcript.