ARCS (9948) Q2 2026 earnings summary

Executive summary

• Interim sales reached a record high, rising 3.6% year-over-year to ¥313.7 billion, driven by increased customer traffic and strengthened local and prepared foods, despite inflation and intensified competition.

• All profit stages improved year-over-year, with operating profit up 11.4% to ¥7.98 billion and net profit up 14.3% to ¥5.71 billion, supported by gross margin gains and controlled SG&A expenses.

• Despite a challenging environment with persistent inflation and weak real wages, cost control and product initiatives drove profit growth.

• Existing store customer count increased 0.8% year-over-year, though average spend per customer slightly decreased.

Financial highlights

• Gross profit increased by ¥2.8 billion, with gross margin up 0.1pt year-over-year to 25.0%.

• Operating profit reached ¥7.98 billion (+11.4% YoY), recurring profit ¥8.76 billion (+9.8% YoY), and net profit ¥5.71 billion (+14.3% YoY).

• Comprehensive income increased 65.2% YoY to ¥6.93 billion.

• SG&A expenses increased mainly due to higher personnel costs, but remained within budget; SG&A ratio improved to 22.4% (down 0.2pt YoY).

• Cash and equivalents at period-end were ¥93.2 billion, up ¥13.2 billion from the previous year.

Outlook and guidance

• Full-year sales/revenue forecast at ¥623 billion (+2.4% YoY), with operating profit expected to rise 2.9% to ¥16.4 billion and net profit to ¥11.2 billion (+1.2%).

• Initiatives include group-wide category management, cost reduction through joint procurement, and productivity improvements.

• Anticipates higher SG&A due to minimum wage hikes, with ongoing cost control measures.

• No changes have been made to the previously announced earnings forecast.