MrMax Holdings Ltd. Q2 FY2026 earnings call

Overall Financial Performance

• The firm hit an all-time interim record operating revenue of 74.7 billion yen, an 8.1% increase year-over-year. Gross profit reached 15.9 billion yen, up 9.3% YoY, with gross margin at 22.2%, a 0.2 percentage point improvement YoY. Operating profit reached 2.807 billion yen, up 25.1% YoY, exceeding the original plan of 2.4 billion yen.
• Gross profit increased by 1.367 billion yen YoY due to strong sales growth and appropriate selling price adjustments aligned with rising procurement costs. Increased expenses were driven by higher personnel costs from base wage increases, plus higher depreciation and supply costs from 2 new store openings, 3 store remodels, and ongoing self-checkout installation. Strong gross profit growth absorbed higher expenses, resulting in solid net operating profit growth.
• Gross margin improvement was modest overall because rice has a below-company-average gross margin; excluding rice, gross margin has improved gradually over time. The firm switched from uniform national pricing to regionally appropriate pricing starting Q3 2025 February fiscal year, and gross margin is on an improving trend, though it missed the initial half-year target.

100th Anniversary Initiatives

• The firm is celebrating its 100th founding anniversary this fiscal year, with three core initiatives: rebuilding the corporate philosophy system, rebranding private brand (PB) products, and running anniversary promotions (starting with a 100-day countdown sale in July, followed by a Grand Founding Festival in October) to attract new and lapsed customers.

Store Network Expansion

• Two new stores opened in the first half of the current fiscal year: the Select Yūkarigaoka Store (a small-format Select model) in Chiba, and the Beppu Store (a compact supercenter format) in Oita, which had a strong opening with high customer turnout. Two more new stores are confirmed for the next fiscal half: the Washiro Store (small Select format) in Fukuoka in Spring 2026, and the Ogori Store (supercenter format) in Fukuoka in early summer 2026, with additional unannounced new store plans in progress.
• The Minoshima Select store was remodeled to add the firm's first 24-hour operation (aligned with high foot traffic in its central Fukuoka location) and restarted tax-free shopping for inbound tourism, with a new section for popular local Fukuoka souvenirs.

Omnichannel & Private Brand Progress

• Online store membership exceeded 450,000 and continues growing steadily. Around half of online customers choose in-store pickup, creating new incentives for in-store visits. Same-day delivery service has expanded to Kitakyushu and Tokorozawa, Saitama, now covering ~850,000 households, and sees high repeat usage from families and customers buying bulky items. The mid-term target is to reach 10% of total sales from omnichannel by 2029.
• PB sales share reached 23.6% and is growing gradually.

Mid-Term Management Plan Progress

• The 5-year plan (2025 February fiscal year to 2029 February fiscal year) has a target of 200.0 billion yen in total sales and 5% operating margin, supported by three core growth strategies. Through the first half of the second year, sales and operating margin are on track to meet plan. The firm maintains its target of 25 new stores over the 5-year period, with no plans to lower the goal after increasing opening pace from a slow 8 stores over the prior 10-year period. The firm is actively exploring M&A opportunities to build new business pillars.

The firm reports segment performance by product category, with no specific revenue contribution percentage provided for each segment: 1. Food Segment: Sales were strong, driven by rice, alcohol, and processed foods. Rice was the top growth driver amid industry-wide supply shortages, as the firm maintained consistent in-stock availability. 2. Home Appliance Segment: Sales grew driven by company-exclusive models of large appliances including air conditioners, washing machines, and refrigerators. 3. Daily Consumer Goods Segment: Sales of detergent, pet products, kitchen supplies, and other daily goods performed strongly following targeted price reduction campaigns to offset rising consumer prices.

• The firm revised its 2026 February full-year fiscal guidance following a stronger-than-expected first half. The existing store sales growth assumption was raised from 3% to 5.2%.
• While first half operating profit was 0.4 billion yen above the initial plan, full-year operating profit guidance was only increased by 0.3 billion yen, to account for slower-than-expected gross margin improvement and higher-than-planned selling, general and administrative (SG&A) costs.
• Planned year-end dividend is 27 yen per share.
• The firm reaffirmed its mid-term 2029 February fiscal year targets of 200.0 billion yen total sales, 5% operating margin, 25 new stores, 10% omnichannel sales share, and continues to pursue these goals without revision.

• Gross margin improvement has been slower than the initial plan, partially due to the low-margin rice sales boom, and missed the first half target. Continued rising personnel and other operating expenses are expected, making gross margin improvement a critical ongoing priority.
• SG&A costs, including personnel costs and cashless fees, are increasing at a pace slightly faster than the initial forecast, which is factored into the full-year guidance downward adjustment.
• Omnichannel sales growth is progressing steadily but has not yet reached a scale that moves the needle on total company revenue, and the firm is accelerating efforts to expand adoption.

Q: Why is the full-year operating profit guidance only up 0.3 billion yen, when first half profit was 0.4 billion yen above the initial plan? / A: Management took a conservative view of full-year gross profit improvement. The initial plan called for a 0.4 percentage point full-year gross margin improvement, but first half only delivered a 0.2 percentage point gain, so the firm does not expect to hit the original full-year improvement target. SG&A costs are also rising at a pace slightly above the initial forecast, so this higher expense trajectory was incorporated into the revised full-year guidance.

Q: What is the current sales status of government reserve rice, and how long will its positive impact last? / A: MrMax began selling reserve rice in June, and it continues selling well. The 4,980 tons contracted (equal to roughly six months of the firm's normal rice sales volume) is on track to sell out entirely by October. Reserve rice has lifted total rice sales, and the publicity around the launch drove higher overall foot traffic. Management expects rice sales growth to level off after November, but is focused on converting new customers drawn by reserve rice into repeat shoppers.

Q: What measures is the firm taking to offset continuing rising personnel costs? / A: First half personnel cost growth was in line with the initial forecast, at around 6% YoY. To improve operational efficiency, the firm converted ~80% of all store registers to self-checkout between last year and May this year, which is expected to cut total store working time by ~6%. Going forward, the firm will continue improving operational efficiency while pushing gross margin improvement to build a profit base that can absorb higher expense growth.

Q: Is talent recruiting for new store expansion progressing on plan? / A: The firm has a plan to hire 100 total employees this fiscal year: 60 new graduates and 40 mid-career hires. Accepted new graduate offers for April 2026 already exceed the number of new graduate hires from April 2025. Mid-career recruiting has been expanded to include store manager roles in addition to specialist positions like buyers, and the firm identifies talent recruitment as a critical priority to support growth.