| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥5366.4B | ¥5122.8B | +4.8% |
| Operating Income / Operating Profit | ¥858.0B | ¥765.1B | +12.1% |
| Ordinary Income | ¥940.5B | ¥851.7B | +10.4% |
| Net Income / Net Profit | ¥513.9B | ¥483.6B | +6.3% |
| ROE | 9.4% | 9.8% | - |
For the fiscal year ended March 2026, Revenue was ¥5366.4B (YoY +¥243.6B +4.8%), Operating Income was ¥858.0B (YoY +¥92.9B +12.1%), Ordinary Income was ¥940.5B (YoY +¥88.8B +10.4%), and Net Income attributable to owners of the parent was ¥513.9B (YoY +¥30.3B +6.3%). The operating margin remained high at 16.0% (up +1.1pt from 14.9% a year ago), led by the high-profitability model of the Overseas Instant Noodles business (Operating Income margin 25.6%). Revenue increased for the fourth consecutive period, and Operating Income achieved double-digit growth. Against the full-year company forecast, Revenue reached 95.8% (slightly below), while Operating Income was 104.7%, Ordinary Income 106.3%, and Net Income 107.0%, indicating upside on the profit side as price and cost management performed better than assumed.
[Revenue] Revenue was ¥5366.4B (+4.8%), continuing a four-period trend of increases. By segment, Overseas Instant Noodles was ¥2481.5B (+6.1%), accounting for 46.2% of total Revenue, supported by price acceptance and increased shipments of the U.S. Maruchan brand. Sales in the Americas were ¥2481.5B (+6.1%), with shipments to major customer Walmart of ¥575.3B, up +12.1% year-on-year. Domestic Instant Noodles were ¥1045.3B (+1.4%), Frozen Foods ¥615.5B (+2.9%), Refrigerated ¥274.8B (+3.6%), Marine Foods ¥338.5B (+7.5%)—all showing solid performance. Processed Foods increased to ¥233.8B (+5.5%) but profitability remains an issue. By region: Japan ¥2877.4B (+3.6%), Americas ¥2481.5B (+6.1%), Other ¥7.4B (+39.4%), with overseas ratio about 46%.
[Profitability] Operating Income of ¥858.0B (+12.1%) outpaced Revenue growth, delivering double-digit profit growth. Gross margin improved to 30.7% (up +0.8pt from 29.9%), and SG&A ratio slightly declined to 14.8% (from 14.9%), improving profitability. Overseas Instant Noodles Operating Income was ¥636.1B (+14.6%, margin 25.6%), representing 74.1% of corporate Operating Income. Domestic Instant Noodles ¥104.7B (+6.6%, margin 10.0%), Frozen Foods ¥80.9B (+0.6%, margin 13.1%), Refrigerated ¥28.2B (+24.1%, margin 10.3%), Marine Foods ¥14.7B (+71.8%, margin 4.3%) all posted profit increases. In contrast, Processed Foods swung into an operating loss of ▲¥4.4B (prior year +¥0.3B), requiring structural correction. Non-operating income totaled ¥87.1B, primarily interest income ¥64.4B (from deployment of cash balances ¥2617.8B) and dividend income ¥8.7B; non-operating expenses were limited to ¥4.6B. Ordinary Income was ¥940.5B (+10.4%), Pre-tax Income ¥942.7B, and after income taxes of ¥237.9B (effective tax rate 25.2%), Net Income attributable to owners of the parent was ¥513.9B (+6.3%); non-controlling interests were ¥2.9B, and Net Income margin reached 9.6%, above historical levels. Extraordinary items included gains on sales of investment securities ¥5.4B and gains on disposal of fixed assets ¥2.9B, while impairment losses ¥2.9B and loss on disposal of fixed assets ¥3.5B were recorded, netting +¥2.2B—immaterial impact. In conclusion, the company achieved both revenue and profit growth, driven by price pass-through, mix improvement, and cost control.
Overseas Instant Noodles: Revenue ¥2481.5B (+6.1%), Operating Income ¥636.1B (+14.6%), margin 25.6% (up +1.9pt from 23.7%), maintaining high profitability. Price acceptance of the U.S. Maruchan brand and production efficiency gains from capacity investments contributed, establishing this as the core business generating 74.1% of corporate Operating Income. Domestic Instant Noodles: Revenue ¥1045.3B (+1.4%), Operating Income ¥104.7B (+6.6%), margin 10.0% (up +0.5pt from 9.5%), where price increases absorbed cost rises. Frozen Foods: Revenue ¥615.5B (+2.9%), Operating Income ¥80.9B (+0.6%), margin 13.1% (slightly down from 13.4%)—stable. Refrigerated business: Revenue ¥274.8B (+3.6%), Operating Income ¥28.2B (+24.1%), margin 10.3% (up +1.7pt from 8.6%)—substantial margin improvement. Marine Foods: Revenue ¥338.5B (+7.5%), Operating Income ¥14.7B (+71.8%), margin 4.3% (up +1.6pt from 2.7%)—procurement and processing efficiency improvements were effective. Processed Foods: Revenue ¥233.8B (+5.5%) increased, but Operating Loss ▲¥4.4B (prior year +¥0.3B, margin ▲1.9%)—turned to loss; product mix review and cost cuts required. Other segments (Bento & Prepared Foods) Revenue ¥401.3B (+6.6%), Operating Income ¥9.4B (+15.7%)—solid.
[Profitability] Operating margin 16.0% (up +1.1pt from 14.9%), Net Profit margin 9.6% (up +0.2pt from 9.4%), Gross margin 30.7% (up +0.8pt from 29.9%)—price pass-through and mix improvement supported margin expansion. ROE was 9.4% (slight decline from estimated 9.8% prior year) affected by share buybacks strengthening (¥235.0B) which reduced equity, but Net Income growth maintained a high level. ROA (ordinary income basis) was 15.2% (up +0.6pt from 14.6%), and Operating Income-based ROA was 13.4%, continuing efficient asset utilization. SG&A ratio was 14.8% (down slightly from 14.9%), with advertising ¥68.6B (1.3% of Revenue) and promotion expenses ¥49.0B—low investment maintained brand. R&D was ¥15.6B (0.3% of Revenue), low and a medium-to-long-term competitiveness concern.
[Cash Quality] Operating Cash Flow (OCF) was ¥851.6B, 1.66x Net Income ¥513.9B, indicating solid cash backing of profits. OCF/EBITDA ratio was 0.82x (EBITDA = Operating Income ¥858.0B + Depreciation ¥182.9B = ¥1040.9B); inventory increase ▲¥50.6B and decrease in accounts payable ▲¥31.5B temporarily suppressed cash generation but were absorbed by high profitability. Free Cash Flow (FCF) was ¥401.3B, 2.0x the dividend amount ¥199.4B—sufficient dividend coverage.
[Investment Efficiency] Capital expenditure ¥418.4B was 2.29x depreciation ¥182.9B, reflecting active investment for increased production in the Americas and system investments. Intangible assets (mainly software) ¥83.3B (up +49.3% from ¥55.8B) indicate strengthened DX and efficiency investments. Total asset turnover was 0.83x (down from 0.86x), slightly reduced due to investment expansion.
[Financial Soundness] Equity Ratio 84.6% (up +1.6pt from 83.0%), Current Ratio 522.3%, Quick Ratio 494.8%—extremely strong. Interest-bearing debt ¥4.8B (only short-term borrowings), Cash and deposits ¥2617.8B, net cash ¥2613.0B—effectively debt-free. Debt/EBITDA ratio 0.00x. Interest coverage: interest income vastly exceeds interest expense ¥1.9B, minimizing financial risk.
OCF was ¥851.6B (+6.6% YoY), generated from Pre-tax Income ¥942.7B after working capital changes and tax payments. OCF subtotal (before working capital changes) was ¥973.4B, including depreciation ¥182.9B and adjustment for interest/dividends received ▲¥73.0B. Working capital changes included inventory increase ▲¥50.6B (production ramp-up and inventory optimization), decrease in accounts receivable +¥11.4B, and decrease in accounts payable ▲¥31.5B, resulting in approximately ▲¥70B net cash outflow. After corporate tax payments ¥195.0B, OCF was ¥851.6B, maintaining 1.66x cash conversion of Net Income ¥513.9B. Investing CF was ▲¥450.3B, primarily Capital Expenditure ▲¥418.4B (capacity expansion in the Americas, domestic system investments) and intangible asset investment ▲¥44.1B (software development). Proceeds from sales of securities ¥8.7B, net change in time deposits ±¥0B, yielding FCF ¥401.3B (OCF + Investing CF). Financing CF was ▲¥437.6B, including dividend payments ▲¥199.4B (Payout Ratio 31.4%), share buybacks ▲¥235.0B, net change in short-term borrowings +¥0.4B, and dividends to non-controlling interests ▲¥1.5B. Cash and equivalents decreased from ¥393.8B at the beginning of the period to ¥356.9B at period-end (down ▲¥36.9B, including foreign exchange effect ▲¥0.6B), balancing shareholder returns and growth investments against a plentiful cash balance.
Ordinary Income ¥940.5B is largely composed of Operating Income ¥858.0B and non-operating income ¥87.1B (mainly interest income ¥64.4B), indicating recurring earnings. Non-operating income equals 1.6% of Revenue and is limited; it includes dividend income ¥8.7B and foreign exchange gains ¥0.7B, showing low structural dependence. Extraordinary items netted +¥2.2B (extraordinary gains ¥8.7B - extraordinary losses ¥6.6B), with gains on sales of investment securities ¥5.4B and disposal of fixed assets ¥2.9B offset by impairment losses ¥2.9B and loss on disposal of fixed assets ¥3.5B—minor one-off impact. OCF ¥851.6B is 1.66x Net Income ¥513.9B, with Accruals = OCF - Net Income = +¥337.7B, indicating strong cash backing of profits. Working capital deterioration (inventory increase and decrease in payables) temporarily suppressed OCF, but accounts receivable collection was smooth and there is no concern over the quality of recurring income. Comprehensive Income ¥937.9B exceeded Net Income ¥513.9B, with foreign currency translation adjustments ¥138.7B (mainly valuation gains from the weaker JPY in the Americas), unrealized gains on securities ¥50.6B, and defined benefit adjustments ¥42.1B contributing. Comprehensive Income attributable to owners of the parent was ¥930.7B, indicating approximately ¥416B of valuation gains from foreign exchange and holdings not reflected in the income statement, signaling real increase in shareholder value.
The full-year forecast was Revenue ¥5600.0B (YoY +4.4%), Operating Income ¥820.0B (▲4.4%), Ordinary Income ¥885.0B (▲5.9%). Actual results were Revenue ¥5366.4B (achievement 95.8%), Operating Income ¥858.0B (104.7%), Ordinary Income ¥940.5B (106.3%), and Net Income attributable to owners of the parent ¥513.9B (achievement 78.3% vs forecast ¥656.0B). Revenue slightly missed company guidance, but Operating and Ordinary Income outperformed due to stronger-than-expected price revisions and stabilization of raw material and energy costs. Shortfall in Net Income suggests company forecast may have included different one-off factors. EPS: forecast ¥666.63 vs actual ¥713.27 (+7.0%), exceeding estimates on a per-share basis. Dividend forecast ¥80.0 vs actual ¥220.0 (total for the period), with the year-end dividend increased from ¥120 to ¥140 to strengthen shareholder returns.
Dividends: interim ¥80.0, year-end ¥140.0, total ¥220.0 (same as prior year), Payout Ratio 31.4% (based on Net Income attributable to owners of the parent ¥513.9B)—a sustainable level. Total dividends ¥199.4B vs FCF ¥401.3B gives dividend coverage 2.0x. Share buybacks ¥235.0B were executed, making total shareholder returns ¥434.4B, which slightly exceeds FCF ¥401.3B; however, strong cash deposits ¥2617.8B and effectively debt-free balance sheet support sustainability. Total Return Ratio on an FCF basis was 108.2%, slightly above FCF, but abundant net cash ¥2613.0B underpins return capacity. Dividend policy emphasizes stable dividends and increases aligned with profit growth (implemented by raising year-end to ¥140). Share buybacks reduced the average number of shares outstanding during the period by 98,404 thousand shares, boosting EPS and improving ROE. Outstanding shares 110,881 thousand less treasury stock 13,539 thousand leaves free-float shares 97,342 thousand, indicating return measures that enhance capital efficiency while limiting decline in the Equity Ratio.
Raw Material & Energy Price Volatility: Cost of goods sold ¥3716.3B (69.3% of Revenue) is primarily wheat flour, edible oils, and packaging materials. Although Gross margin improved to 30.7% (up +0.8pt YoY), spikes in global commodity markets or further JPY depreciation could squeeze margins, and delayed price pass-through could jeopardize maintaining the 16.0% operating margin. Inventory valuation risk exists with inventories ¥198.4B (prior year ¥184.6B).
FX & Geopolitical Risk in Overseas Operations: Overseas sales ratio 46.2% (mainly Americas ¥2481.5B). Rapid JPY appreciation against USD or MXN would pressure earnings. Overseas Instant Noodles Operating Income ¥636.1B (74.1% of corporate profit) has FX sensitivity; the ¥138.7B foreign currency translation gain included in Comprehensive Income is a valuation gain, but a reverse move could impair shareholder value. U.S. trade policy changes or tariffs could affect supply costs and selling prices.
Structural Loss Risk in Processed Foods: Processed Foods segment generated Revenue ¥233.8B but an Operating Loss ▲¥4.4B (margin ▲1.9%), turning to loss. If corrective measures in this segment do not progress, dilution of corporate operating margin and structural weakness in profitability could persist. Delays in SKU rationalization, SG&A reduction, or repricing would entrench reliance on high-profit segments to offset weakness, constraining growth potential.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 16.0% | 5.0% (3.3%–8.4%) | +11.0pt |
| Net Profit Margin | 9.6% | 3.2% (1.9%–6.6%) | +6.4pt |
Profitability metrics significantly exceed industry medians, with the high-profit model of Overseas Instant Noodles delivering standout performance within the food industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 4.8% | 5.4% (1.0%–8.6%) | -0.6pt |
Revenue growth is around the industry median, maintaining a stable upward trend. High overseas ratio and mature domestic markets moderate the growth pace.
※Source: Company compilation
The high-profit structure of Overseas Instant Noodles is established, accounting for 74.1% of Operating Income and driving corporate margins. Strong brand equity and pricing power of the U.S. Maruchan brand achieved a 25.6% operating margin (up +1.9pt from 23.7%), and progress on capacity expansion investments supports medium-term supply capability. Domestic Instant Noodles and Frozen Foods also delivered steady profit increases, continuing portfolio-wide margin improvement.
Effectively debt-free (net cash ¥2613.0B) and an extremely strong balance sheet enabled total shareholder returns of ¥434.4B (dividends + buybacks) while nearly balancing with FCF ¥401.3B and continuing growth capex ¥418.4B. Inventory increase and decreased payables caused a working capital cash outflow (about ▲¥70B), temporarily suppressing OCF/EBITDA to 0.82x; if inventory normalization and payable terms stabilize next fiscal year, cash conversion can improve significantly, supporting sustainable FCF growth.
The swing to an operating loss in Processed Foods (Operating Loss ▲¥4.4B, margin ▲1.9%) remains a structural remediation priority—SKU rationalization, cost cuts, and repricing are next year's focus. The pace of improvement in this segment will determine sustainability of the corporate 16.0% operating margin; delays risk entrenching a dependence on high-margin segments and constraining growth. Monitoring will focus on whether increased capacity investments in Overseas Instant Noodles translate into higher utilization and margin maintenance, and on resilience to raw material, energy, and FX fluctuations.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement briefing data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.