Morozoff Limited (TSE: 2217), the long-established Kobe confectionery maker, reported first-quarter results on June 9, 2026 for the three months from February 1 to April 30, 2026 — the opening quarter of its fiscal year ending January 2027. Consolidated revenue edged up 1.7% year-on-year to ¥9,152 million, but profitability weakened sharply: operating profit fell 35.3% to ¥272 million, ordinary profit dropped 35.0% to ¥280 million, and net profit attributable to owners of the parent declined 30.7% to ¥183 million, from ¥264 million a year earlier. Earnings per share fell to ¥9.12 from ¥13.06.
Morozoff is best known as a pioneer of Valentine's Day chocolate in Japan and for its custard pudding, baked sweets and gift confections, which are sold through department stores and its own retail network. The first quarter spans the seasonally important Valentine's period, so the steep profit decline against broadly flat revenue points to cost pressures — chiefly higher raw-material and operating costs — squeezing margins during the group's busiest selling window.
Revenue holds but margins compress on higher costs
The combination of a modest revenue gain and a more-than-a-third drop in operating profit indicates that rising input costs outpaced pricing during the quarter. With the operating margin narrowing to roughly 3.0% of revenue from about 4.7% a year earlier, the result underscores the cost pressure facing confectionery makers reliant on cocoa, dairy and other imported ingredients, whose prices have remained elevated. The near-identical declines in ordinary and net profit suggest the pressure was concentrated at the operating level rather than in financing or one-off items.
Balance sheet remains strong; guidance and dividend unchanged
Morozoff's balance sheet stayed robust, with total assets of ¥28,516 million, net assets of ¥19,889 million and a high equity ratio of 69.7%, leaving the company conservatively financed despite the softer quarter. Management left full-year guidance for the year ending January 2027 unchanged, projecting revenue of ¥36,820 million (+1.5%), operating profit of ¥1,310 million (+3.6%), ordinary profit of ¥1,350 million (+5.0%) and net profit of ¥770 million (+19.8%), equivalent to EPS of ¥38.37. The annual dividend forecast was also maintained at ¥16.00 per share (¥6 interim + ¥10 year-end), signalling management's confidence that the full-year targets remain achievable despite the weak start.
| Metric | Q1 FY1/2027 | Q1 FY1/2026 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 9,152 | 8,998 | +1.7% |
| Operating profit (¥ million) | 272 | 421 | −35.3% |
| Ordinary profit (¥ million) | 280 | 431 | −35.0% |
| Net profit (¥ million) | 183 | 264 | −30.7% |
| EPS (¥) | 9.12 | 13.06 | −30.2% |
| Total assets (¥ million) | 28,516 | — | — |
| Net assets (¥ million) | 19,889 | — | — |
| Equity ratio | 69.7% | — | — |
| Annual dividend forecast (¥) | 16.00 | — | — |
| FY guidance — revenue (¥ million) | 36,820 | — | +1.5% |
| FY guidance — operating profit (¥ million) | 1,310 | — | +3.6% |
| FY guidance — net profit (¥ million) | 770 | — | +19.8% |
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