Morinaga Milk Q1 Operating Profit Rises 13% on Overseas Growth as Domestic Milk Volumes Fall

Two businesses moving in opposite directions

Morinaga Milk Industry Co., Ltd. (TSE: 2264) published consolidated results for the three months to June 30, 2026 on August 7, 2026 under Japanese GAAP. Net sales rose 2.4% to ¥147,099 million, operating profit 12.9% to ¥9,977 million and ordinary profit 11.3% to ¥10,607 million — but net profit attributable to owners of the parent fell 3.4% to ¥6,678 million, for earnings per share of ¥20.69 against ¥20.73.

The company is explicit about the split. Domestic sales fell: price revisions carried out last year and an improved product mix helped, but volumes declined, led by milk, and the domestic business ended down on revenue. Overseas sales rose, with MILEI GmbH the largest contributor, alongside overseas sales of bacterial cultures, infant formula and the US business.

The profit split runs the same way. Domestically, price revisions, mix improvement and lower operating costs from the production-system reorganisation all helped, but lower volumes and continued cost inflation in packaging materials, raw materials, energy, logistics and labour left the domestic business down on operating profit. Overseas, MILEI GmbH gained on higher selling prices amid a rising whey-protein market, and cultures and infant formula also improved, so overseas operating profit rose.

One segment that is really the whole company

Morinaga Milk reports a Food segment and an Other segment covering feed, plant-equipment design and construction, and property leasing. Food is 96% of external revenue at ¥140,687 million (+1.9%) with segment profit up 9.6% to ¥12,841 million; Other grew revenue 14.4% to ¥6,411 million and profit 7.4% to ¥884 million. Unallocated corporate costs and inter-segment eliminations take ¥3,748 million off the total.

The group is in year two of its four-year Medium-Term Business Plan 2025-28, concentrating resources on yogurt, ice cream, bacterial cultures including bifidobacteria, and overseas infant formula, while reorganising the group structure and production system for productivity. Mount Rainier Café Latte is named as a driver within the core beverage range.

Guidance revised down, and a dividend that needs a footnote

Full-year FY3/2027 guidance was revised: net sales of ¥580,000 million (+1.5%), operating profit of ¥34,000 million (−1.4%), ordinary profit of ¥35,000 million (−5.7%) and net profit of ¥21,000 million (−7.1%), for earnings per share of ¥65.06. First-half targets are ¥300,000 million, ¥20,000 million, ¥20,500 million and ¥14,000 million.

The quarter's 12.9% operating-profit growth against a full-year target of −1.4% implies the company expects the remaining nine months to go backwards. Total assets rose 4.8% from the March year-end to ¥573,250 million while net assets were near-flat, easing the equity ratio to 48.3% from 50.2%.

The dividend line cannot be read straight. The company carried out a four-for-one stock split effective July 1, 2026. The FY3/2027 forecast of ¥25.00 per share is stated post-split, while the FY3/2026 figure of ¥100.00 is the actual pre-split amount — the company states this explicitly. Per pre-split share the two are equivalent; the earnings-per-share figures in this table are all on the post-split basis, which is why ¥20.69 sits beside ¥20.73.

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.