Natori Swings to ¥839 Million Q1 Operating Profit as Gross Margin Jumps to 25.5%

Natori Co., Ltd. (TSE: 2922), the Tokyo-based maker of dried seafood, meat and cheese snacks eaten as otsumami alongside a drink, reported consolidated first-quarter results for the three months to June 30, 2026 under Japanese GAAP. Revenue eased 1.7% to ¥11,852 million, but operating profit came in at ¥839 million against a ¥97 million operating loss a year earlier. Ordinary profit was ¥865 million, reversing a ¥73 million ordinary loss, and net profit attributable to owners of the parent was ¥595 million, against a ¥14 million net loss in the year-ago quarter.

A margin-led profit swing

The turnaround was driven almost entirely by the cost of sales line. Gross profit surged 44.2% to ¥3,026 million and the gross margin widened to 25.5% from 17.4% — an eight-point improvement on a slightly smaller revenue base. Selling, general and administrative expenses were held essentially flat at ¥2,187 million, down 0.4% year on year, so nearly all of the ¥928 million gross-profit gain dropped through to the operating line. The operating margin came in at 7.1%, against minus 0.8% a year earlier. Pre-tax profit was ¥866 million and the tax charge ¥271 million.

Squid shortage drags on the top line

Revenue moved the other way. Natori has been introducing new products designed for everyday snacking rather than purely as drinking companions, and continued sales-promotion work on its core lines, but declining squid (ika) catches — compounded by the volume impact of its own price revisions on squid-based items — were more than the new lines could absorb. Squid remains the single most important raw material in Natori's range, and the company flagged further increases in its cost during the quarter.

Costs still rising, but more than offset

Management said input pressure has not eased: on top of higher squid and other raw-material prices, worsening conditions in the Middle East pushed up packaging-material and energy costs, while logistics and labour costs also rose. Those headwinds were more than offset by four self-help measures — price revisions working their way through to shelf prices, changes to the sourcing regions and fish species used, tighter cost control, and an improved product mix. By segment, the food manufacturing and sales business posted revenue of ¥11,741 million (−1.8%) and segment profit of ¥758 million, against a ¥178 million segment loss a year earlier; the small real-estate leasing business contributed revenue of ¥110 million (+3.3%) and profit of ¥80 million (+0.2%).

Cheese snacks lead the product mix

Within the food business, dairy-processed products — the Cheese Tara family, including the bulk "Cheese Tara Value Pack" and the new portion-sized "Cheese Tara Mini" — were the standout, with revenue up 17.1% to ¥2,497 million and the group's share of sales rising to 21.1% from 17.7%. Agricultural-processed products, helped by the JOLLY PACK single-serve nut range, rose 5.9% to ¥623 million; chilled products gained 3.4% to ¥497 million on the "Smooth Cheese Tara" line and a limited-edition Calbee collaboration; and other products, led by premium assortments, edged up 1.5% to ¥780 million. On the downside, seafood-processed products fell 8.7% to ¥4,733 million despite gains in new items such as shredded dried squid and fried squid sticks, meat-processed products slipped 4.8% to ¥1,971 million as price-revised lines lost volume, and pocket confectionery dropped 11.9% to ¥638 million against a strong year-earlier quarter for dried-plum products during the 2025 heatwave.

Balance sheet solid; full-year guidance unchanged

Total assets stood at ¥43,069 million at June 30, up ¥484 million from the March year-end, as cash and deposits rose ¥390 million to ¥4,997 million and raw materials and supplies climbed ¥521 million on a deliberate inventory build ahead of the summer peak; trade receivables fell ¥441 million to ¥8,386 million on faster collection. Liabilities edged up ¥84 million to ¥14,992 million, with trade payables ¥615 million higher on the same inventory build. Net assets rose ¥399 million to ¥28,077 million as retained earnings gained ¥431 million despite the dividend payment, lifting the equity ratio 0.2 point to 65.2%. Depreciation for the quarter was ¥280 million, against ¥288 million a year earlier. Natori left its full-year FY3/2027 consolidated forecast, published on May 13, 2026, unchanged; per-share earnings and dividend details were not restated in the attached materials to this quarterly report.

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