Kobe Bussan (3038) Q2 2025 earnings summary

Executive summary

• Net sales for the six months ended April 30, 2025, rose 9.7% year-over-year to ¥272.3 billion, driven by robust new store openings, strong product shipments, and effective pricing strategies.

• Operating profit increased 7.7% year-over-year to ¥19.1 billion, with gross profit up 8.3% despite yen depreciation and industry cost pressures.

• Ordinary profit surged 16.0% year-over-year to ¥20.9 billion, aided by subsidy income and gains on forward exchange contracts.

• Profit attributable to owners of parent climbed 15.6% year-over-year to ¥14.3 billion.

• Growth was supported by private label product performance and an expanded store network, despite economic uncertainties.

Financial highlights

• Net sales for FY2025 Q2: ¥272.3 billion (+9.7% YoY); gross profit: ¥31.7 billion (+8.3% YoY); operating profit: ¥19.1 billion (+7.7% YoY).

• Ordinary profit: ¥20.9 billion (+16.0% YoY); comprehensive income up 13.4% to ¥14.3 billion; net margin improved to 5.2%.

• Basic earnings per share increased to ¥64.48 from ¥55.93 year-on-year.

• Total assets grew to ¥243.8 billion, with net assets at ¥142.6 billion and an equity ratio of 57.0%.

• SG&A expenses increased 9.3% year-over-year, mainly due to higher freight and personnel costs.

Outlook and guidance

• FY2025 full-year forecast: net sales ¥525 billion, operating profit ¥37.7 billion, net income ¥24 billion, EPS ¥108.35.

• Targeting a net increase of 34 Gyomu Super stores and 1-2% YoY growth in existing store sales.

• No revisions to previously published earnings or dividend forecasts.

• Focus on expanding private label product ratio and acquiring more savings-oriented consumers.