Kakiyasu Honten's Operating Profit Falls 72.8% as a Flat Cost Base Meets a 2.4% Revenue Decline

A flat cost base turned a 2.4% revenue decline into a 72.8% profit fall

Kakiyasu Honten Co., Ltd. (TSE: 2294), the Kuwana, Mie-based operator of meat shops, delicatessen counters, Japanese-confectionery shops, restaurants and a food-products business, published consolidated results for the three months to July 31, 2026 on September 9, 2026 under Japanese GAAP. Revenue fell 2.4% to ¥8,446 million, operating profit 72.8% to ¥65 million, ordinary profit 65.6% to ¥87 million and profit attributable to owners of the parent 88.8% to ¥16 million — earnings of ¥1.72 per share against ¥15.40. Comprehensive income was ¥49 million against ¥153 million.

The arithmetic is short. Revenue fell ¥211 million and gross profit ¥173 million, a 3.7% decline steeper than the top line's because the gross margin slipped to 52.8% from 53.5%. Selling, general and administrative expenses did not move: ¥4,393 million against ¥4,392 million, an increase of one million yen. With a cost base that size resting on ¥65 million of operating profit, almost the whole of the ¥173 million lost from gross profit came out of the operating line, and the operating margin fell to 0.8% from 2.8%. In the same quarter a year earlier, revenue had risen 0.4% and operating profit fallen 4.9%.

Only the confectionery business grew, and it contributes the least profit

Meat, the largest business, had revenue of ¥3,122 million, down 2.9%, and segment profit of ¥129 million, down 21.8%. Delicatessen was close behind at ¥3,044 million, down 2.0% — but its segment profit fell 46.2% to ¥123 million, nearly half of it gone on a 2.0% revenue decline. The company describes an earnings environment in which consumers are still saving hard while raw-material prices rise and the labour shortage worsens; it does not break those costs out by segment.

Japanese confectionery was the only business to grow, with revenue up 4.4% to ¥1,597 million and segment profit up 1.9% to ¥25 million — the smallest profit of the five. It was also the only place the store network moved: one confectionery store closed during the quarter, and nothing opened. Restaurants is the segment in loss, with revenue down 27.3% to ¥252 million and a segment loss of ¥21 million against a segment profit of ¥0 million a year earlier. Food products had revenue of ¥429 million, down 6.3%, and segment profit of ¥38 million, down 22.0%.

What the quarter was spent on

In meat, the company ran monthly "thank-you bags" offering its own Kuroge Wagyu brand, Mie Kakiyasu Gyu, at a keen price, and added further discounts through its web reservation system, Nikuyoyaku. In the delicatessen business it repeated last year's popular anime-designed beef-hotpot bento and put a Mie Kakiyasu Gyu beef rice and a top-grade A5 menchi-katsu into selected stores, working the same beef brand from both ends of the group.

Confectionery launched a summer-strawberry daifuku and a pistachio-chocolate daifuku, ran anime and film collaborations, and marked the company's 155th anniversary with value thank-you bags. Restaurants added rice-bowl products in its food-court format — beef short-rib and pork-fillet katsu combinations — and a limited-period grilled beef short-rib series through a very hot July. Food products began supplying sweets to hotel breakfast buffets and dining rooms, and its Hotate Usudaki scallop tsukudani was adopted for international first-class in-flight meals. Across the group, the company says it is studying composite-format stores that combine several of its businesses under one roof, alongside new product development and new sales channels.

The balance sheet shrank with the tax payment

Total assets fell 4.4% to ¥18,617 million from ¥19,480 million at April 30, 2026, and net assets 4.9% to ¥14,740 million. Current liabilities fell ¥152 million to ¥3,337 million, mainly on accrued income taxes down ¥255 million. Because equity fell slightly faster than assets, the equity ratio eased to 79.2% from 79.6% — a balance sheet still funded almost four-fifths by equity.

Guidance unchanged after a quarter worth 4.6% of the year's operating profit

Full-year guidance for FY4/2027 is unchanged: revenue of ¥36,000 million (−0.2%), operating profit of ¥1,400 million (−1.9%), ordinary profit of ¥1,450 million (−1.6%) and profit attributable to owners of ¥800 million (−1.4%), for earnings per share of ¥83.50. The quarter just reported delivered 4.6% of that operating-profit guidance and 2.0% of the net guidance, and the company left the forecast in place — the remaining 95.4% of the operating-profit target falls to the nine months to April 30, 2027.

The dividend is likewise unchanged: ¥85.00 per share for FY4/2027, nothing at the interim and ¥85.00 at the year-end, the same as the ¥85.00 paid for FY4/2026, with no revision recorded. Set against guided earnings per share of ¥83.50, the guided payout is larger than the guided profit.

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.