Heiwado Co., Ltd. (8276): FY2025 Results Summary — Record Revenue, but Consolidated Profit Declines on Merger Effects

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

Note: Heiwado’s fiscal year runs from February 21 to February 20; this summary covers the fiscal year ended February 20, 2026, labeled “FYE 2/2026” in the company’s own materials and classified here as FY2025 per site convention.

Heiwado Co., Ltd. reported consolidated operating revenue of ¥456,010 million for the fiscal year ended February 20, 2026 (102.5% YoY), a record high on both a consolidated and non-consolidated basis. Consolidated ordinary profit came in at ¥14,605 million (99.8% YoY) and profit attributable to owners of parent declined to ¥9,409 million (87.7% YoY). On a non-consolidated basis, both revenue and profit increased, with operating revenue of ¥422,251 million (104.6% YoY) and profit of ¥9,540 million (108.0% YoY).

Consolidated and Non-Consolidated Results (Full-Year Actual)

The company’s own summary characterizes the year as “Consolidated: Increase in revenue, decrease in profits. Non-Consolidated: Increase in revenue and profits.” The JPY7,454 million gap between consolidated and non-consolidated YoY operating revenue growth is primarily driven by subsidiary mergers and business transfers (totaling JPY7,958 million), including Maruzen, Yell and YU-ING.

Item	Consolidated FYE 2/2026	Consolidated FYE 2/2025	Consol. YoY	Non-Consol. FYE 2/2026	Non-Consol. FYE 2/2025	Non-Consol. YoY
Operating Revenue	456,010	444,898	102.5	422,251	403,686	104.6
Operating Profit	13,313	13,360	99.6	10,340	10,326	100.1
Ordinary Profit	14,605	14,639	99.8	12,165	12,106	100.5
Profit Attributable to Owners of Parent / Profit	9,409	10,727	87.7	9,540	8,831	108.0

Segment Results (Group Companies)

Among the group companies, Bestone’s operating profit rose to ¥939 million from ¥814 million and Fivestar’s rose to ¥293 million from ¥135 million, aided by robust food sales and strong performance at the COCO’S and PISOLA formats, respectively. National Maintenance’s operating profit fell to ¥560 million from ¥702 million, and Heiwado (China)’s operating profit fell to ¥278 million from ¥684 million amid a deteriorating business environment in China and reduced operations due to renovations.

Company	Op. Revenue FYE 2/2026	Op. Revenue FYE 2/2025	Op. Profit FYE 2/2026	Op. Profit FYE 2/2025
Heiwado (Non-Consolidated)	422,251	403,686	10,340	10,326
Bestone	45,409	42,168	939	814
Fivestar	12,277	11,339	293	135
National Maintenance	10,408	10,461	560	702
C.O.M.	4,306	4,082	366	355
Direct Shop	4,159	4,335	(3)	(7)
Toyama Future Development	2,896	2,884	355	289
Heiwado (China)	5,696	6,866	278	684
Consolidated	456,010	444,898	13,313	13,360

Forecast for the FYE 2/2027

For the fiscal year ending February 2027, Heiwado forecasts higher non-consolidated earnings, underpinned by progress in sales and productivity enhancements within its 5th Medium-Term Management Plan, while intensifying its focus on gross margin and expense management to address the profit decline of FYE 2/2026. Consolidated subsidiaries are expected to see a profit increase on a combined basis for the continuing companies.

Item	Consolidated Forecast	Consol. YoY	Non-Consol. Forecast	Non-Consol. YoY
Operating Revenue	478,000	104.8	448,000	106.1
Operating Profit	14,300	107.4	11,400	110.3
Ordinary Profit	15,200	104.1	15,100	124.1
Profit Attributable to Owners of Parent	9,800	104.1	11,000	115.3

Shareholder Returns

For the FYE 2/2026, the interim and year-end dividends were each 33 yen, resulting in an annual dividend of 66 yen, in accordance with the company’s shareholder return policy of returning 30% or more of net profit to shareholders as dividends. For the FYE 2/2027, based on its profit growth plan and the same 30%-or-more payout policy, the interim and year-end dividends are each forecast at 33 yen, for an estimated annual dividend of 66 yen. The company states it will maintain a “progressive dividend” policy through the FYE 2/2027 and will return surplus capital to shareholders while maintaining financial discipline.

Item	FYE 2/2025	FYE 2/2026	FYE 2/2027 (Forecast)
Net Profit (Millions of yen)	10,727	9,409	9,800
Dividend per Share (yen)	63	66	66
Dividend Payout Ratio (%)	30.1	34.9	33.3

Medium-Term Plan / Topics

Under its Fifth Medium-Term Management Plan, Heiwado has set 2030 quantitative targets of operating revenue of ¥500 billion or more, an operating profit margin (consolidated) of 4.5% or more, and ROE of 8.0%, alongside a target of 20% or more for the percentage of women in management, a 46% reduction in CO2 emissions (Scope 1 and 2, compared to FYE 2/2014), and a 50% reduction in the amount of food waste (compared to FYE 2/2020). ROE for FYE 2/2026 was 4.9%, and PBR was 0.76x. The company states that, given its PBR has remained below 1.0x for an extended period, it is committed to further enhancing corporate value in line with “Management Conscious of Cost of Capital and Stock Price.”

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.