Hikari Food Service H1 Net Profit Jumps 55% as Revenue Climbs 15%; Store Count Reaches 67

Hikari Food Service Co., Ltd. (TSE: 138A), a Nagoya-based operator of izakaya and casual dining restaurants, reported non-consolidated results for the first half of the fiscal year ending November 2026 — the six months from December 1, 2025 to May 31, 2026 — under Japanese GAAP. Revenue rose 14.6% to ¥1,632 million, operating profit climbed 36.4% to ¥180 million, ordinary profit gained 38.3% to ¥178 million, and interim net profit surged 55.0% to ¥137 million. Earnings per share came to ¥138.12, up from ¥89.09 a year earlier.

Sales growth outruns the cost curve

The standout feature of the half was operating leverage: a 14.6% top-line gain translated into a 36.4% jump in operating profit, lifting the operating margin to 11.0% from 9.3% a year earlier. That is a notably wide margin for a Japanese restaurant operator, and it was achieved against an industry backdrop the company itself describes as difficult — persistently elevated raw-material and energy prices layered on top of rising personnel and recruiting costs. Management credits store-level initiatives: original in-store events, limited-time menus, and continued work on QSC (quality, service and cleanliness) fundamentals.

Sixty-seven stores, seventeen of them franchised

Hikari Food Service ended the half with 67 stores, of which 17 are franchised. During the six months it opened one new franchise outlet and closed two directly managed stores, leaving the network essentially flat in unit terms — meaning the revenue gain came predominantly from existing stores rather than from expansion. The company runs a single reportable segment (the restaurant business), so no segment breakdown is disclosed. Brand-building sat alongside operations on the management agenda: the company ran IR activity across multiple media outlets and exhibited at the FREEDOM NAGOYA 2026 music festival in May, using the event both to raise brand awareness and as a recruiting channel in a tight labour market.

Balance sheet strengthens on cash build

Total assets closed the half at ¥2,884 million, up ¥232 million from the November 2025 year-end, with net assets rising to ¥1,407 million from ¥1,310 million. The entire asset increase came from current assets, which grew ¥232 million to ¥1,864 million as cash and deposits added ¥209 million and receivables ¥31 million, partly offset by a ¥12 million decline in accrued income. Fixed assets were essentially flat at ¥1,020 million, as a ¥50 million increase in guarantee deposits and ¥11 million in deferred tax assets offset a ¥58 million reduction in property, plant and equipment and a ¥2 million decline in software. Liabilities rose ¥135 million to ¥1,477 million, split ¥705 million current and ¥772 million non-current. The equity ratio edged down to 48.8% from 49.4%, reflecting the balance-sheet expansion rather than any weakening of capital.

Full-year guidance left untouched

Despite the strong first half, management left its forecasts for the full year to November 2026 unchanged from the prior announcement: revenue of ¥3,200 million (+11.8%), operating profit of ¥242 million (+7.5%), ordinary profit of ¥238 million (+7.7%) and net profit of ¥127 million (+24.0%), with EPS of ¥128.08. The arithmetic is conservative — the half already delivered ¥180 million of operating profit against a ¥242 million full-year target, and ¥137 million of net profit against a ¥127 million full-year figure — a reflection of the seasonal skew in izakaya trading and of management's caution on the second-half cost outlook. The macro picture cited in the filing is a Japanese economy in gradual recovery on expanding inbound demand and firm consumer spending, but with geopolitical risk, a worsening labour shortage, strong wage growth and inflation keeping the outlook uncertain.

Dividend held at ¥48

The company reiterated its plan to pay a ¥48.00 year-end dividend for FY11/2026, with no interim payment — up from the ¥40.00 paid for FY11/2025 and unchanged from the previous forecast. Shares outstanding stood at 992,000 with no treasury stock. Hikari Food Service held an earnings briefing for institutional investors and analysts, and published supplementary materials on TDnet the same day. The interim figures are not subject to auditor review.

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.