Ichibanya Q1 FY2/27 Profit Falls 14% as Rice and Beef Costs Bite Despite 8% Sales Growth

Ichibanya Co., Ltd. (TSE: 7630) reported consolidated results for the first quarter of the fiscal year ending February 28, 2027 (Q1 FY2/2027, covering March 1 to May 31, 2026) under Japanese GAAP. Net sales rose 7.8% year-on-year to ¥16,976 million, but operating profit fell 14.3% to ¥1,085 million, ordinary profit dropped 15.8% to ¥1,144 million, and net profit attributable to owners of the parent declined 21.1% to ¥728 million from ¥922 million. Basic earnings per share came in at ¥4.56 versus ¥5.78 a year earlier. Comprehensive income, helped by foreign-currency translation and securities-valuation swings, bucked the trend and rose 9.6% to ¥790 million.

Sales up, but cost inflation squeezes every profit line

The quarter's story is a familiar one for Japanese restaurant operators: solid top-line momentum overwhelmed by input-cost inflation. Sales grew on the back of price revisions and the expansion of overseas and domestic-subsidiary operations, but the company flagged higher purchase prices for rice, beef and other ingredients, together with rising logistics and other costs, as the reason all profit measures fell. Cost of sales climbed 8.6% to ¥8,601 million and selling, general and administrative expenses rose 11.1% to ¥7,289 million — both outpacing the 7.8% sales gain — pushing the gross margin and operating margin lower. Operating margin compressed to roughly 6.4% from 8.0% a year earlier.

Domestic CoCo Ichibanya: traffic and ticket both positive

Across the core domestic CoCo Ichibanya network — company-operated plus franchise stores — chain-wide store sales rose 3.1% to ¥23,103 million, with same-store sales up 2.5%. Both pillars of the comp were positive: same-store customer counts edged up 0.5%, helped by promotions including a collaboration with popular VTubers from the Hololive Production group and the re-release of the poll-winning "Holo Niku Dokan Goukai Curry" from its hearty "Meat Chunk Curry" series, while average spend per customer climbed 1.9% on limited-time menus such as the hand-prepared chicken-cutlet curry, "THE Beef Curry," and the Kerala Chicken Spice Curry, plus various campaigns. The domestic CoCo Ichibanya store count rose by a net two outlets from the prior year-end to 1,207 stores.

Overseas mixed; domestic subsidiaries surge

Overseas, chain-wide store sales rose 13.9% to ¥5,031 million, with same-store sales up 2.0% excluding currency effects — the United States and South Korea lagged the prior year, but Hong Kong, the United Kingdom and Thailand performed well. Net of six openings and seven closures of unprofitable stores, the overseas count slipped by one to 217 stores. In a notable U.S. branding move, the company opened a store inside Petco Park, home of Major League Baseball's San Diego Padres, in March 2026, complete with backstop advertising to lift brand awareness in its priority U.S. market. Separately, the domestic-subsidiary businesses — spanning the Asahikawa Genghis Khan "Daikokuya" mutton grill, the Menya Takei tsukemen/ramen brand, Hakata motsu-nabe "Maedaya," ramen, late-night parfait shops, and the newly acquired "Kyu Yamutei" spice-curry chain — lifted chain-wide store sales 73.5% to ¥1,649 million on new openings, with the store count up seven to 57.

Balance sheet steady; equity ratio firms to 67.6%

Total assets stood at ¥46,997 million at quarter-end, down ¥1,173 million from the prior year-end, mainly on a ¥2,134 million drop in cash and deposits, partly offset by a ¥217 million rise in fixed assets. Liabilities fell ¥687 million to ¥14,598 million as accrued payables declined, while net assets eased ¥486 million to ¥32,399 million. The equity ratio firmed to 67.6% from 67.0% at the prior year-end, and book value per share was ¥199.10 — leaving the curry operator with a notably conservative, debt-light financial profile.

Full-year guidance and ¥16 dividend held unchanged

Ichibanya reaffirmed the full-year and first-half forecasts it published on April 6, 2026. For the full FY2/2027, management guides net sales of ¥72,600 million (+10.8%), operating profit of ¥5,000 million (+6.0%), ordinary profit of ¥5,040 million (+1.1%), and net profit attributable to owners of ¥2,720 million (+6.1%), for full-year EPS of ¥17.04 — implying a stronger second half as price revisions and store expansion are expected to outrun cost pressure. The first-half outlook is more cautious, with operating profit guided down 14.5% to ¥2,160 million. The annual dividend forecast is held at ¥16.00 per share (¥8 interim + ¥8 year-end), unchanged from the prior year. With Q1 operating profit at ¥1,085 million, the company has booked about 22% of its full-year operating-profit target after three months.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.