MatsukiyoCocokara & Co. (3088): FY2025 Results Summary — Record Profit on Cosmetics and Inbound Demand

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MatsukiyoCocokara & Co. (3088) announced its consolidated financial results for FY2025 (the fiscal year ended March 31, 2026) on May 20, 2026. Net sales rose 5.3% year on year to 1,117,440 million yen, driven by strong sales of cosmetics, growth in duty-free sales on an increase in foreign visitors to Japan, and the consolidation of MATSUMOTO KIYOSHI (HK) CO., LIMITED and Shinseidoyakkyoku co., ltd. Operating profit increased 3.5% to 84,935 million yen, and the company achieved record high profit by controlling expenses through KPI management. The annual dividend for the year was 50 yen per share, an increase of 6 yen year on year.

Consolidated Results (Full-Year Actual)

Net sales achieved the plan, while operating profit was slightly below the plan due to higher SG&A associated with new consolidation; the gross profit margin improved on increased sales of high value-added products such as PB (private brand) products and cosmetics. The operating profit margin was 7.6% (down 0.1pt year on year), and EBITDA increased 3.7% to 108,596 million yen (EBITDA margin 9.7%). Monthly sales for all stores rose 4.1% year on year in total, with same-store sales up 1.4%.

Item (Millions of yen)	FY2024	FY2025	Change (amount)	Change (%)
Net sales	1,061,626	1,117,440	55,813	5.3
Gross profit	372,235	393,784	21,549	5.8
SG & A	290,153	308,849	18,696	6.4
Operating profit	82,082	84,935	2,852	3.5
Ordinary profit	86,271	89,855	3,584	4.2
Profit attributable to owners of parent	54,675	55,776	1,100	2.0
EBITDA	104,681	108,596	3,914	3.7

Segment Results

In the Matsumotokiyoshi Group business, sales and profit increased due to strong sales of cosmetics, store openings in urban areas, and promotion of in-store prescription drug stores. The Cocokarafine Group business saw a decline in both sales and profits due to temporary revenue decreases from structural reforms implemented through 3Q, but achieved growth in both sales and profits in 4Q, driven by gross margin improvement and cost control. Year-on-year figures for the And Company business are not presented because the company became a consolidated subsidiary on October 1, 2025.

Segment	Metric (Millions of yen)	FY2024	FY2025	Change (%)
Matsumotokiyoshi Group Business	Sales	667,226	711,413	6.6
Matsumotokiyoshi Group Business	Segment profit	57,952	60,818	4.9
Cocokarafine Group Business	Sales	391,026	389,977	(0.3)
Cocokarafine Group Business	Segment profit	23,805	23,456	(1.5)
And Company Business	Sales	–	12,948	–
And Company Business	Segment profit	–	200	–

Sales by Product, Balance Sheet, and Cash Flows

By product, cosmetics sales increased 7.9% year on year to 381,282 million yen, and the composition ratio of the health and beauty category rose to 72.4% (+0.9pt). The overall gross profit margin by product improved 0.3pt to 36.1% on steady promotion of priority measures and stronger sales of PB products, exclusive products, and high-value-added products. Total assets increased by approximately ¥43.0 billion from the end of the previous fiscal year to 755,831 million yen, and the equity ratio was 71.9% (down 1.2 pts), reflecting the acquisition of treasury shares implemented in May 2025. Cash flows from operating activities were 73,201 million yen, and free cash flow was approximately ¥38.9 billion. The total number of stores in Japan reached 3,618 as of March 31, 2026 (including 1,112 dispensing pharmacies).

FY2026 Forecast

For FY2026 (the fiscal year ending March 31, 2027), the company forecasts net sales of 1,155,000 million yen (103.4% of the prior year) and operating profit of 87,500 million yen (103.0%). The assumptions include full-year same-store sales growth of +0.7% (1H +0.7%, 2H +0.6%), 130 store openings, 60 closings, and 80 renovations, with AppBrew Inc. and UNIVERSAL DRUG CO., LTD. newly consolidated (and Shinseidoyakkyoku co., ltd. for 1H of FY2026).

Item (Millions of yen)	FY2026 Forecast	YoY (%)
Net sales	1,155,000	103.4
Gross profit	413,500	105.0
SG & A	326,000	105.6
Operating profit	87,500	103.0
Ordinary profit	91,500	101.8
Profit	59,000	105.8
EBITDA	113,000	104.1

Shareholder Returns

The year-end dividend for the fiscal year ended March 2026 was ¥26, up ¥2 from the forecast announced on November 13, 2025 (up ¥3 year on year), bringing the total annual dividend to ¥50, an increase of ¥6 year on year. For the fiscal year ending March 31, 2027, the second quarter-end dividend is scheduled to be 28 yen (up 4 yen) and the annual dividend is scheduled to be 56 yen (up 6 yen). The company maintains a progressive dividend policy of maintaining or increasing dividends, targets a dividend on equity (DOE) ratio of 6% and a dividend payout ratio of 50% for the fiscal year ending March 31, 2031, and will flexibly implement share buybacks taking into consideration its financial condition and stock price level. During FY2025, the company implemented share buybacks of approximately ¥15.3 billion and dividend payments of approximately ¥18.9 billion.

Dividend per share (Yen)	FY2025	FY2026 (Forecast)
Second quarter-end	24.0	28
Year-end	26.0	28
Annual	50.0	56

Medium-Term Plan / Topics

Under its medium-term management plan, the Group aims to become Asia’s No.1 drugstore and establish a leading position in the health and beauty fields, with management targets for the fiscal year ending March 31, 2031 (FY2030) of net sales of ¥1.3T from organic growth, an EBITDA margin of 13% or more, ROE of 12% or more, a dividend payout ratio of 50%, and DOE of 6%. In FY2025, ROE was 10.5% and ROIC was 11.1%, against a cost of capital the company recognizes to be within the range of approximately 5.3-7.5%. The PB product sales composition ratio rose to 14.8% (+1.2pt year on year), group digital members reached 30.33 million (114.1% of the prior year), and combined LIPS app downloads and MatsukiyoCocokara digital members totaled 44.70 million (+5.20 million year on year), with LIPS + MatsukiyoCocokara marketing revenue up 118% year on year. Overseas, the company newly entered the Malaysian market and now operates 100 stores in seven areas, targeting net sales of 100.0 billion yen from overseas operations in FY2030.

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.