ITO EN, LTD. (2593): FY2025 Results Summary — Higher Sales, Lower Profit as Group Structural Reforms Advance

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

ITO EN, LTD. reported consolidated net sales of 497,877 million yen for FY2025 (the fiscal year ended April 30, 2026, covering May 2025 to April 2026), up 5.3% year on year, while operating income declined 5.6% to 21,684 million yen. Ordinary income rose 1.3% to 23,267 million yen, but net income fell 75.5% to 3,466 million yen, reflecting extraordinary losses and income of △16,423 million yen. For FY2026 the company forecasts net sales of 500,000 million yen and a recovery in net income to 11,430 million yen, and it plans to raise the annual dividend on common stock by 4 yen to 52 yen, aiming for a fourth consecutive year of dividend increases.

Note: ITO EN’s fiscal year runs from May to April, and the company labels the year ended April 30, 2026 as FY2025 in its presentation; this article follows the company’s labeling. Figures are transcribed as reported in the English-language presentation.

Consolidated Results (Full-Year Actual)

Consolidated net sales increased 25,161 million yen (5.3%) to 497,877 million yen, while gross profit was nearly flat at 179,417 million yen (-0.1%) with the gross margin declining from 38.0% to 36.0%. Selling, general and administrative expenses rose 0.7% to 157,733 million yen, leaving operating income down 5.6% at 21,684 million yen. In the supplement to its operating income bridge, the company cites an impact of −9.7 billion yen from sharp rises in prices of raw materials and supplies at ITO EN on a non-consolidated basis, against a +2.2 billion yen effect of sales increases and +2.5 billion yen from cuts in advertising and promotional expenses. Extraordinary losses and income of △16,423 million yen (versus △742 million yen in FY2024) drove net income down 75.5% to 3,466 million yen.

Item (million yen)	FY2025	FY2024	YoY Change	YoY %
Net Sales	497,877	472,716	25,161	5.3%
Gross Profit	179,417	179,638	△220	-0.1%
Selling, General and Administrative Expenses	157,733	156,668	1,065	0.7%
Operating Income	21,684	22,969	△1,285	-5.6%
Ordinary Income	23,267	22,973	293	1.3%
Extraordinary Losses and Income	△16,423	△742	–	–
Net Income	3,466	14,156	△10,689	-75.5%

Group Company Results

On a non-consolidated basis, ITO EN’s net sales rose 1.9% to 341,310 million yen while operating income fell 16.6% to 12,432 million yen and net income dropped 87.3% to 1,479 million yen. Among domestic subsidiaries, Tully’s Coffee Japan grew net sales 7.0% to 46,856 million yen with operating income of 3,555 million yen, while ITO EN NEOS posted an operating loss of △514 million yen. Overseas subsidiaries expanded net sales 26.6% to 74,369 million yen and operating income 40.6% to 4,229 million yen, with the US business growing net sales 28.5% to 66,355 million yen. The average exchange rate during the year was 151.95 yen per US dollar.

Company (million yen)	Net Sales FY2025	YoY %	Operating Income FY2025	YoY %
ITO EN (non-consolidated)	341,310	1.9%	12,432	-16.6%
Tully’s Coffee Japan Co., Ltd.	46,856	7.0%	3,555	1.1%
Chichiyasu Company	12,214	-5.2%	957	-22.2%
ITO EN NEOS, LTD.	22,860	-0.2%	△514	–
Other Domestic Subsidiaries	38,942	-6.5%	726	32.6%
Domestic Subsidiaries (total)	120,874	-0.3%	4,724	-10.3%
Overseas Subsidiaries	74,369	26.6%	4,229	40.6%
Consolidated	497,877	5.3%	21,684	-5.6%

Structural Reforms and the Vending Machine Business

The company is advancing structural reforms across the entire domestic supply chain — optimizing product SKUs, reducing material, manufacturing and logistics costs, improving inventory turnover, and rebuilding the sales system — together with a reorganization of the group by function. ITO EN TEA FACTORY, created from the merger of two tea leaf manufacturing companies, began operating in May 2025, and HOKKAIDO ITO EN and TSUCHIKURA merged with operations launched in May 2026. The vending machine business has been transferred to group company ITO EN NEOS, which will specialize in vending machine operations; the company targets making the vending machine business profitable by FY2028, with operating income forecast to be in deficit in FY2026, a narrowed deficit in FY2027, and a surplus in FY2028.

Overseas Business and the Globalization of Oi Ocha

Overseas business was the growth driver, with overseas subsidiaries’ net sales up 26.6% to 74,369 million yen. “Oi Ocha” was sold in 52 countries and regions in FY2025, and the company aims to expand this to 60 countries and regions by FY2028 and 100 countries and regions by FY2040. Overseas sales volume of Oi Ocha beverages grew 12% year on year and Oi Ocha tea bags grew 17%, and the company targets overseas Oi Ocha beverage sales volume of 10 million cases by FY2028, approximately 1.6 times the 5.84 million cases sold in FY2025. A local subsidiary was established in India in April 2026, and ITO EN Europe achieved profitability in its second year after establishment. The company also notes the global matcha boom: Japan’s green tea exports reached a record 72.1 billion yen and 12,612 tons in 2025, and ITO EN’s matcha sales grew 41% year on year (May 2025 to April 2026).

FY2026 Forecast

For FY2026 (May 2026 to April 2027), the company forecasts consolidated net sales of 500,000 million yen (up 0.4%), operating income of 20,000 million yen (down 7.8%), ordinary income of 20,500 million yen (down 11.9%), and net income of 11,430 million yen (up 229.7%). The company expects a −11.6 billion yen impact from sharp rises in prices of raw materials and supplies on ITO EN’s non-consolidated results, commenting that although profitability is improving, it is being significantly impacted by rising costs for green tea raw materials and other supplies. The assumed average exchange rate is 155.00 yen per US dollar. Non-consolidated net sales are forecast to decline 5.6% to 322,300 million yen following the reclassification associated with the restructuring of the vending machine business, while ITO EN NEOS’s net sales are forecast to rise to 62,000 million yen.

Item (million yen)	FY2026 Forecast	FY2025 (Actual)	YoY %
Net Sales	500,000	497,877	0.4%
Operating Income	20,000	21,684	-7.8%
Ordinary Income	20,500	23,267	-11.9%
Net Income	11,430	3,466	229.7%

Shareholder Returns

ITO EN positions shareholder return as a top-priority management task, aiming for a total return ratio of 40% or more under a basic policy of continuing to increase dividends in line with the growth of profit. The annual dividend per share of common stock for FY2025 was 48 yen (interim 24 yen, year-end 24 yen), up 4 yen from FY2024, and the company is considering increasing the dividend again in FY2026 to a forecast 52 yen (interim 26 yen, year-end 26 yen), aiming to increase dividends for four consecutive years. The annual dividend on Class-A preferred stock was 60 yen for FY2025, with 66 yen forecast for FY2026; the preferred stock dividend is 1.25 times the common stock dividend (rounded up to the nearest whole number).

Dividend per Share (Common Stock, yen)	FY2023	FY2024	FY2025	FY2026 (Forecast)
Interim	21	22	24	26
Year-end	21	22	24	26
Annual	42	44	48	52
YoY	+2 yen	+2 yen	+4 yen	+4 yen

Medium-Term Plan

FY2025 was the second year of ITO EN’s five-year Medium-Term Management Plan (FY2024 to FY2028), under the long-term vision of becoming a “Global Tea Company.” Against the FY2023 baseline of consolidated net sales of 453.8 billion yen, an operating income ratio of 5.5%, ROE of 8.9%, and a total return ratio of 52.7%, the plan targets an average annual net sales growth rate of 2% or more, an operating income ratio of 8% or more, ROE of 10% or more, and a total return ratio of 40% or more by FY2028, with an average annual growth rate of 24% or more for Oi Ocha overseas. The long-term future vision for FY2040 calls for average annual net sales growth of 3% or more and an operating income ratio of 10% or more, with Oi Ocha sold in more than 100 countries.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.