A quarter that is half the year's profit plan
ITO EN, LTD. (TSE: 2593) published consolidated results for the three months to July 31, 2026 on September 1, 2026 under Japanese GAAP. Net sales rose 3.3% to ¥135,180 million, operating profit 22.0% to ¥10,200 million, ordinary profit 13.4% to ¥10,122 million and net profit 14.8% to ¥6,559 million, for earnings per share of ¥56.93 against ¥49.60.
The arithmetic of the quarter against the year is worth stating plainly. Full-year guidance is unchanged at operating profit of ¥20,000 million — a 7.8% decline — yet this one quarter earned ¥10,200 million, or 51.0% of that target, on 27.0% of the sales target. Either the remaining nine months are expected to be far weaker than the one just reported, or the guidance is conservative; the company says only that it is unchanged from the forecast published on June 1, 2026.
Margin, not volume, did the work: sales grew 3.3% while operating profit grew nearly seven times as fast, lifting the operating margin to 7.5% from 6.4%. Note also that ordinary profit grew only 13.4% against 22.0% at the operating line, so items below operating profit gave back part of the gain.
The core segment supplied three-quarters of the increase
Leaf & Drink Related, the tea and beverage business that is 89.2% of sales, grew revenue 2.7% to ¥120,629 million and its segment profit 23.5% to ¥8,993 million — a ¥1,712 million increase against a group operating-profit increase of ¥1,840 million. Food Service grew revenue 8.4% to ¥12,405 million and profit 9.3% to ¥991 million, and Other 9.5% to ¥2,146 million with profit up 22.9% to ¥220 million.
On structure, the company consolidated its vending-machine operations into a new subsidiary, Ito En Neos, established in May 2026, and expects optimisation of sales territories and delivery networks to raise profitability and efficiency. Overseas it sells in 52 countries and regions and is targeting more than 60 by FY4/2029; in markets it has already entered, beverage and tea-bag volumes are growing and brand recognition is improving steadily.
A balance sheet that grew faster than equity
Total assets rose 8.0% from the April year-end to ¥370,189 million, an increase of ¥27,521 million. Accounts receivable rose ¥13,880 million, raw materials and supplies ¥13,821 million and merchandise and finished goods ¥6,232 million, against a ¥11,620 million fall in cash and deposits. Liabilities rose ¥23,580 million to ¥188,296 million, with accounts payable up ¥12,601 million and short-term borrowings up ¥8,316 million.
Net assets rose only 2.2% to ¥181,892 million — retained earnings gained ¥6,559 million from the quarter's profit and lost ¥2,958 million to dividends — so the equity ratio fell to 48.7% from 51.4%. That is inventory and working capital being built out ahead of the season rather than a change in leverage, but it is the clearest thing the balance sheet did this quarter.
Full-year FY4/2027 guidance is net sales of ¥500,000 million (+0.4%), operating profit of ¥20,000 million (−7.8%), ordinary profit of ¥20,500 million (−11.9%) and net profit of ¥11,430 million (+229.7%), for earnings per share of ¥95.44 — the very large net-profit growth rate implying that the prior year carried a substantial charge below the ordinary line. The annual dividend is raised to ¥52.00 from ¥48.00, split ¥26.00 interim and ¥26.00 final. Per-share and dividend figures cover common shares; the company also has Class 1 preferred shares, for which separate per-share information is disclosed.
| Metric | Q1 FY4/2027 | Q1 FY4/2026 | Change |
|---|---|---|---|
| Net sales (¥ million) | 135,180 | 130,875 | +3.3% |
| Operating profit (¥ million) | 10,200 | 8,360 | +22.0% |
| Operating margin | 7.5% | 6.4% | +1.1 pt |
| Ordinary profit (¥ million) | 10,122 | 8,924 | +13.4% |
| Net profit (¥ million) | 6,559 | 5,712 | +14.8% |
| EPS (¥) | 56.93 | 49.60 | +14.8% |
| Leaf & Drink Related — revenue (¥ million) | 120,629 | 117,467 | +2.7% |
| Leaf & Drink Related — segment profit (¥ million) | 8,993 | 7,281 | +23.5% |
| Food Service — revenue (¥ million) | 12,405 | 11,447 | +8.4% |
| Food Service — segment profit (¥ million) | 991 | 907 | +9.3% |
| Other — revenue (¥ million) | 2,146 | 1,960 | +9.5% |
| Other — segment profit (¥ million) | 220 | 179 | +22.9% |
| Total assets (¥ million) | 370,189 | 342,667 | +8.0% |
| Net assets (¥ million) | 181,892 | 177,951 | +2.2% |
| Equity ratio | 48.7% | 51.4% | −2.7 pt |
| FY4/2027 guidance — revenue (¥ million) | 500,000 | — | +0.4% |
| FY4/2027 guidance — operating profit (¥ million) | 20,000 | — | −7.8% |
| FY4/2027 guidance — ordinary profit (¥ million) | 20,500 | — | −11.9% |
| FY4/2027 guidance — net profit (¥ million) | 11,430 | — | +229.7% |
| FY4/2027 guidance — EPS (¥) | 95.44 | — | n.m. |
| Annual dividend per share (¥) | 52.00 | 48.00 | +8.3% |
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.