Financial Review
The business environment for our Group during this consolidated fiscal year (April 1, 2023 to March 31, 2024) saw an increase in the amount of people moving around compared to the previous fiscal year, which helped to drive a recovery in customer numbers.
In this environment, our group has been working on developing highly appealing products, store designs, and store visit motives in Japan. In our overseas business, we acquired Fulham Shore Limited of the UK as a subsidiary in July 2023 and consolidated the company from the second quarter of the consolidated fiscal year.
As a result, sales revenue reached a record high of 231,952 million yen (up 23.2% year on year), with all segments - Marugame Seimen, Domestic and Others, and Overseas - recording record highs.
Although raw material costs, labor costs, and utility costs increased both domestically and overseas, these were absorbed by increased revenue, resulting in a significant increase in operating profit (Note 1) to 14,536 million yen (up 108.1% from the previous fiscal year), also a record high.
In the previous fiscal year, we recorded million yen in government subsidies such as subsidies for shortening business hours related to COVID-19, but in the current fiscal year, this amounted to only 42 million yen, which resulted in a decrease of 4,596 million yen in other operating income compared to the previous fiscal year, but this was absorbed by a significant increase in business profit. On the other hand, other operating expenses decreased by million yen compared to the previous fiscal year due to the recording of one-off expenses of 1,227 million yen in the reorganization of the Chinese business in the previous fiscal year.
As a result, operating profit (Note 2) was 11,647 million yen (up 56.0% year on year), and profit for the period attributable to owners of the parent was 5,675 million yen (up 48.3% year on year), both of which were significant increases.
(Note 1) Business profit: Sales revenue - Cost of sales - Selling, general and administrative expenses
(Note 2) Operating profit: Business profit - impairment loss + other operating income - other operating expenses
Performance by Segment
In the Marugame Seimen segment, we launched the brand communication "We want to surprise you with our udon" during this fiscal year, and developed a marketing strategy that combines a brand strategy that creates perceptions to continue to be chosen by customers with a product strategy that creates impulse to simultaneously spiral up brand value, customer experience (CX), and employee experience (EX).
In February 2024, a new TV commercial titled "Fluffy! Chewy! Kamaage Udon" was aired nationwide, focusing on the signature product "Kamaage Udon" that has been offered since the company's founding. Sales of standard products increased by promoting the deliciousness of the signature product, which can be confidently recommended because the udon is made from flour every day at every store.
In March 2024, the placement of noodle craftsmen (Note 3) in all stores was finally completed. To commemorate the placement in all stores, a pop-up store operated only by noodle craftsmen, "Marugame Seimenjo," was opened for a limited time in Kanda Ogawamachi, Tokyo, where "Marugame Seimenjo Three Types of Tasting Udon" was served. The company also focused on noodle craftsmen and promoted their desire to deliver more delicious udon, their commitment and confidence in the noodle craftsmen through TV commercials, events, special websites, etc.
Seasonal fair products also performed well, and in the second half of the current consolidated fiscal year, we launched the "Delicious winter dishes made with a little extra effort!" series. The first two products, "Duck and Onion Udon" and "Meat and Egg Udon with Sauce," which went on sale from December 5, 2023, were huge hits, selling approximately 1.6 million and 1.77 million meals, respectively. The second product, "Kagoshima Black Beef Wagyu Sukiyaki Kamatama Udon," which uses branded beef, was sold for a limited time from December 12, and the third product, "Crab and Egg Udon with Sauce," which uses real snow crab, was sold from January 3 to 15, 2024. The fourth and final product in the series, "Oyster and Egg Udon with Sauce," which uses a luxurious six oysters from Hiroshima Prefecture, and the new product "Oyster Bukkake Udon," were introduced on January 30.
On the other hand, in order to address rising labor costs and rising costs of raw materials, we implemented price revisions for some products on January 16, 2024.
As a result of these efforts, sales revenue reached a record high of 114,856 million yen (up 12.5% year on year). Although costs, labor costs, and advertising expenses also increased, these were absorbed by the increase in sales, and business profit also increased significantly to a record high of 18,351 million yen (up 57.9% year on year).
(Note 3) Noodle craftsman: A specialist who makes the perfect udon, based on Marugame Seimen's unique human resource development system
The Domestic Others segment includes Kona's Coffee, Zundoya, Meat Yamagyu (Note 4), Banbaya, Tempura Makino, Tori Doll, Ton-ya Ton-ichi, Nagata Honjoken, and Baked Koppe Bakery.
Zundoya, a tonkotsu ramen restaurant chain that operates 87 stores, maintained high profitability, with existing stores in the Kansai region, such as Osaka, performing particularly well, and 13 new stores also steadily becoming profitable.
Kona's Coffee, which operates under the concept of "the closest Hawaiian dining table," has seen an increase in both the number of customers and average customer spending at existing stores, while its new Yachiyo Midorigaoka store has achieved some of the highest monthly sales in the country, making it an early profitable chain.
Yamagyu Meat's Akabane store, a grocerant (Note 5) type store that opened in November 2023, performed well. In addition, the Takenotsuka store, which opened in February 2024, is a new model store that does not have an in-store dining area and specializes in the sale of takeout and delivery of bento and side dishes, and recorded the highest monthly sales in its format in March.
Tempura Makino has strengthened its fair set meals and tempura that mainly use seasonal ingredients, and has been successful in capturing inbound demand, such as an increase in foreign tourists.
Buta-ya Tonichi's Matsudo Station store, which opened on November 14th, also focused on selling take-out bento boxes, and achieved some of the highest sales of its type.
As a result, revenue increased 15.0% year on year to 28,460 million yen, and business profit also increased significantly to a record high of 4,451 million yen (up 46.2% year on year).
(Note 4) "Yamaki Meat Shop" changed its name to "Yamagyu Meat" on November 29, 2023.
(Note 5) Grocerant: A business model that combines grocery and restaurant functions
Tam Jai, a spicy noodle business, opened six new stores in China, seven new stores in Hong Kong, and one new store in Singapore, bringing the total to 229 stores, and recorded increased revenue and profits. Marugame Udon opened six new stores in Taiwan, and personnel training was successful in improving the quality of its products and services, leading to significant increases in revenue and profits. In the United States, revenue and profits also increased, due to an increase in customer numbers at existing stores and favorable performance at new stores. In the UK, we also worked to strengthen our ability to attract customers, leading to increased revenue, but investments for growth continued to be made ahead of schedule.
Revenues increased significantly to a record high of 88,637 million yen (up 44.2% year on year) due to the consolidation of UK subsidiary Fulham Shore from the second quarter and the impact of exchange rates. Normalized operating profit fell short of plan due to the impact of one-off expenses of 656 million yen in the US in the fourth quarter, but still increased significantly to 2,970 million yen (up 64.2% year on year).
Monthly sales
Consolidated Financial Statements
Earnings Forecast
Consolidated financial forecast for the fiscal year ending March 2025(April 1, 2024 - March 31, 2025)
million yen (year-on-year change)
sales revenue | 265,000（+14.2％） |
|---|---|
business profit | 18,100（+24.5%） |
Operating income | 1４,１00（＋21.1%） |
Profit attributable to owners of the parent company | 6,460（+13.8%） |
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