Seiyu Takes Trial Past ¥1.3 Trillion of Revenue and Cuts Its Net Profit 70%

A ¥409.7 billion acquisition doubles the top line

Trial Holdings Inc. (TSE: 141A), the Kyushu-rooted discount retailer that runs the Trial supercentre chain and, since July 2025, the Seiyu supermarket group, published consolidated results for the year to June 30, 2026 on August 13, 2026 under Japanese GAAP. Revenue rose 67.6% to ¥1,347,109 million, EBITDA 100.2% to ¥69,953 million and operating profit 43.9% to ¥30,371 million. Ordinary profit fell 9.1% to ¥20,186 million and net profit attributable to owners of the parent fell 70.0% to ¥3,522 million, for earnings per share of ¥28.76 against ¥96.23. Comprehensive income was ¥6,474 million, down 45.5%.

Almost all of the growth comes from one transaction. Trial acquired 100% of Seiyu on July 1, 2025 for ¥409,650 million in cash, funded by bank borrowings and its own funds, and consolidated it for the full twelve months — the first day of the fiscal year, so the comparison is a whole year of Seiyu against none. The purchase generated goodwill of ¥306,551 million, which the company is writing off on a straight-line basis over 20 years; acquisition-related advisory costs came to ¥2,623 million. Thirteen companies entered the consolidation and one left. Trial's stated logic is geographic: its own base is Kyushu, while Seiyu's stores sit mainly in the densely populated Kanto, Chubu and Kansai regions, and the company says it sees little overlap between the two networks.

Seiyu brought 245 stores — 170 supermarkets and 75 hypermarkets, five of them under the LIVIN banner. Trial itself opened three mega centres, 21 supercentres, two smart stores and seven small stores while closing seven smart stores, ending the year with 378 stores including three franchises; Seiyu opened one and closed three, ending with 243. The group closed the year with 621 stores. Three "Trial Seiyu" conversion stores opened in November 2025, February 2026 and April 2026 as an attempt at an urban general-merchandise format, and private-brand ranges now cross both ways, with Seiyu's "Minasama no Osumitsuki" sold in Trial stores and Trial's delicatessen lines in Seiyu's. Segment reporting shows how concentrated the group is: Retail produced revenue of ¥1,342,480 million (+67.9%) and segment profit of ¥34,875 million (+47.0%). Retail AI saw revenue slip 6.8% to ¥918 million but profit rise from ¥55 million to ¥657 million, with the Skip Cart checkout-enabled trolley in 288 stores and 24,031 units at end-June including sites outside the group. Other, the property and resort business, grew revenue 7.9% to ¥2,949 million and profit 42.2% to ¥915 million.

Everything the deal cost sits below the operating line

Operating profit rose 43.9%, ordinary profit fell 9.1% and net profit fell 70.0%. The filing lets each step of that reversal be identified. Non-operating expenses rose to ¥12,543 million from ¥423 million: interest expense of ¥4,270 million against ¥70 million a year earlier, and ¥6,745 million of borrowing-related costs that did not exist at all in the prior year. Non-operating income of ¥2,357 million, up from ¥1,518 million, went nowhere near covering it. An impairment loss of ¥1,919 million, all of it in the Retail segment, then took pre-tax profit down 7.9% to ¥18,266 million.

The tax line does the rest of the damage. The total charge was ¥14,142 million — current tax of ¥12,022 million plus a deferred charge of ¥2,120 million — or 77.4% of pre-tax profit, against 38.5% a year earlier, when a deferred credit of ¥924 million lightened the load. The tanshin carries no reconciliation of the effective rate, so the arithmetic is all the filing offers. Net profit of ¥4,123 million less ¥601 million attributable to non-controlling interests left ¥3,522 million for the parent's owners. Separately, and already inside the operating result, sits goodwill amortisation of ¥15,331 million: the company's own earnings per share before that charge is ¥153.95 against the reported ¥28.76, and on a 20-year straight-line schedule a charge of that order recurs every year for two decades.

A balance sheet rebuilt on borrowed money, and a year already disrupted

Total assets rose ¥507,540 million to ¥807,824 million, up 169.0%, and goodwill of ¥291,957 million now accounts for 36% of them. Buildings and structures rose ¥50,992 million, land ¥41,455 million, lease and guarantee deposits ¥30,554 million and inventories ¥29,899 million. Liabilities rose ¥502,199 million to ¥673,454 million, with short-term borrowings up ¥340,900 million and trade payables up ¥76,550 million. Net assets rose only 4.1% to ¥134,369 million and shareholders' equity only to ¥130,903 million from ¥126,125 million, so the equity ratio fell to 16.2% from 42.0% — the numerator barely moved and the denominator nearly tripled. The same event appears three times in the cash-flow statement: operating cash flow turned to an inflow of ¥92,055 million from a ¥4,446 million outflow, investing used ¥405,015 million of which ¥358,958 million was the Seiyu purchase net of cash acquired, and financing raised ¥309,392 million, chiefly ¥367,400 million of short-term borrowing. Cash at year end was ¥68,901 million, ¥3,424 million lower than a year before.

That short-term borrowing was a one-year bridge facility maturing on July 1, 2026. The company signed a syndicated term-loan agreement on June 26, 2026 arranged by MUFG Bank with Mizuho Bank as co-arranger, and drew ¥317,400 million and ¥50,000 million of ten-year loans on July 1, 2026, priced over three-month TIBOR, repayable in equal quarterly instalments from September 2026 and unsecured, with covenants requiring net assets to stay at or above 75% of the prior year end and barring two consecutive years of consolidated operating loss. Guidance for FY6/2027 assumes the one-off costs do not repeat: revenue of ¥1,458,200 million (+8.2%), EBITDA of ¥83,100 million (+18.8%), operating profit of ¥39,000 million (+28.4%), ordinary profit of ¥28,600 million (+41.7%) and net profit of ¥10,700 million (+203.8%), for earnings per share of ¥87.15 — against ¥211.77 before goodwill amortisation. The annual dividend is ¥17.00 against ¥16.00, a payout ratio of 59.1% on this year's depressed earnings and a guided 19.5% next year. One risk is not quantified anywhere in the guidance: the Kumamoto earthquake of July 28, 2026 damaged store fittings, warehouses and inventory and cut power and gas supply, and as of August 13 some group stores and facilities were still closed. The company says the scale of the damage is under investigation and that it cannot reasonably estimate the effect on the coming year.

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.