MrMax Holdings Ltd. Q4 FY2026 earnings call

• Overall 2026 Fiscal Year Performance

  • Operating revenue reached 147.6 billion yen, up 8.1% year-over-year, marking 4 consecutive years of revenue growth and 2 consecutive years of record high revenue.
  • Net sales hit 142.1 billion yen, up 8.2% year-over-year, driven by aggressive rice procurement, the 100th anniversary founding sale, and expanded private brand (PB) sales.
  • Gross profit rose 8.3% year-over-year to 31.1 billion yen, with flat 21.9% gross margin.
  • Operating income grew 16.3% year-over-year to 4.445 billion yen, marking 2 consecutive years of profit growth, as gross profit gains offset higher operating expenses.
  • Same-store sales grew year-over-year, with customer traffic growth particularly strong, driven by reserve rice sales and the 100th anniversary sale; these initiatives drove sustained repeat visits rather than one-time foot traffic.
  • The company opened 2 new stores in the 2026 fiscal year: a small-format MrMax Select store in Chiba Prefecture, and a full-size supercenter format in Oita Prefecture that got off to a strong start led by its home appliance department.

• Omnichannel and Online Store Progress

  • Online store membership surpassed 600,000, with ~half of orders using in-store pickup, which acts as an additional driver of in-store foot traffic.
  • Same-day delivery service has expanded to multiple new regions, with growing repeat usage especially among households with children for heavy items like rice and beverages.
  • Large appliance delivery area was expanded to allow delivery outside existing store catchment areas in the Kanto region, supporting broader omnichannel growth.

• 2027 Fiscal Year Planned Initiatives

  • Core focus on existing store revitalization via store remodeling and core assortment reform, targeting gross margin improvement and higher sales floor efficiency.
  • 5 store remodels are planned, rolling out successful formats from 2026 remodels that created lifestyle-focused, testable product displays, optimized sales floor space, and improved restocking efficiency to reduce out-of-stocks.
  • Assortment reform will focus on reducing SKU count to build top-selling lines, curate strong national brand products, grow PB offerings, and continue testing new product categories.
  • Stores will adjust opening hours to match local catchment customer lifestyle patterns to maximize sales and efficiency.

Full aggregated results for the 2026 February fiscal year show: All product segments achieved year-over-year sales growth. Food (led by rice) was the top growth driver, with rice expanding sharply to lead overall company sales growth. Price-focused consumer goods including detergent, pet products, and alcoholic beverages performed well amid rising inflation. Trending products including Nintendo Switch 2 and popular children's stickers contributed to additional sales growth. Large home appliances grew sales thanks to the continued rollout of company-exclusive models from major appliance manufacturers, with washing machines, air conditioners, and refrigerators delivering solid contributions. While overall gross profit margin held flat at 21.9% year-over-year (due to a shift in sales mix toward lower-margin rice), all segments excluding rice and game consoles saw improving gross margin, driven by ongoing profitability improvement efforts.

• 2027 February fiscal year (FY2027) guidance calls for 6.2% year-over-year sales growth to 151 billion yen, and 9.1% year-over-year operating income growth to 4.85 billion yen, based on an assumption of 3% same-store sales growth.
• A year-end dividend of 29 yen per share is planned for FY2027.
• Four new store openings are already confirmed for FY2027, with additional unannounced openings expected that would make annual new store openings a record high for the company; the 5-year medium-term management plan (FY2025-FY2029) target of 25 total new store openings by FY2029 is maintained with no downward revision, despite a current cumulative delay vs the original plan.
• The medium-term plan maintains its target of 200 billion yen in total sales and 5% operating margin by the final FY2029. Sales are currently tracking roughly in line with plan, but profitability remains behind target.
• PB sales currently exceed 20% of total sales, and the company targets 30% PB sales share; a planned PB rebranding in FY2027 will accelerate growth and improve customer awareness.
• M&A activity is ongoing to build new core business lines, and management targets closing M&A deals starting in FY2027 after a period of increased deal consideration with no completed transactions to date.

• Rising labor costs driven by increasing wage levels are partially offset by ongoing store operation efficiency improvements, but continued cost growth could pressure margins if efficiency gains do not keep pace.
• Current new store openings are running behind the original medium-term management plan schedule, even though the 25 total store target is maintained.
• Operating profit margin currently stands at 3.1%, well below the 5% medium-term target, and achieving the target requires accelerated improvement in profitability and gross margin.
• PB sales growth remains behind the 30% target, requiring additional acceleration to hit medium-term goals.
• Omnichannel and e-commerce expansion is progressing, but has not yet meaningfully contributed to overall company sales, representing an unfulfilled growth opportunity that requires continued investment.
• New store opening costs have the potential to rise amid increasing construction costs, which could impact payback periods for new locations.

Q: Will there be a negative sales impact after the strong 2026 reserve rice sales, how will management offset any potential pullback?

A: Management notes that reserve rice sales drove significant new customer foot traffic, and many of these new customers have returned for repeat purchases across other product categories. The company expects sustained benefit from these new customer acquisitions, and planned existing store revitalization and new store openings will offset any modest single-category pullback.

Q: Is there room to further improve overall gross margin despite current mix pressure from lower-margin food?

A: Most segments excluding rice and game consoles already see improving margin from ongoing pricing discipline and sourcing optimization. Management expects continued gradual improvement as assortment reform and PB expansion progress, offsetting mix shifts to deliver overall margin gains over the medium term.

Q: What is the outlook for online store profitability and what are the improvement plans?

A: The online channel currently operates at breakeven or modest profitability, with its main additional benefit being driving in-store foot traffic via in-store pickup. Management will continue expanding delivery service areas and improving product selection and website usability to grow user volume and leverage its existing store network for long-term omnichannel profitability.

Q: How has rising construction cost impacted new store opening costs and payback periods?

A: Construction costs have risen moderately, but the company is managing costs via careful site selection and optimized store design for its two format sizes. Management expects current payback period targets to remain achievable even with higher costs, and the accelerated opening pace will not compromise investment return requirements.