H2O Retailing (8242) Q4 2026 earnings summary

Executive summary

• Consolidated gross sales for FY2025 increased slightly to JPY 1,162.4 bn (+0.2% YoY), but operating profit declined 7% YoY to JPY 32.4 bn due to rising costs and a sharp drop in inbound sales in the Department Store Business.

• Domestic department store sales rose 3% YoY, but inbound sales fell 20% YoY after a surge the previous year; supermarket business saw steady growth in both sales and profit.

• Profit attributable to owners of parent dropped 14% YoY to JPY 29,950 million.

• Comprehensive income decreased 22.9% to JPY 32,053 million.

Financial highlights

• FY2025 gross sales: JPY 1,162.4 bn (+0.2% YoY); operating profit: JPY 32.4 bn (–7.0% YoY); profit: JPY 30.0 bn (–14.0% YoY).

• Department Store segment sales fell 2.2% YoY; Supermarket segment sales rose 0.9% YoY; Shopping Center sales dropped 5.3% YoY; Other segment sales surged 22.5% YoY.

• Supermarket operating profit hit a record JPY 10.0 bn (+12.0% YoY); Department Store operating profit fell 15.8% YoY.

• Operating margin was 4.8%, down from 5.1% in FYE2025.

• Cash and cash equivalents at year-end increased to JPY 57,812 million.

Outlook and guidance

• FY2026 gross sales forecast: JPY 1,245.0 bn (+7.1% YoY); operating profit: JPY 32.5 bn (+0.4% YoY); profit: JPY 23.0 bn (–23.2% YoY).

• Net sales for FYE2027 are forecast at JPY 712,000 million, a 4.7% increase YoY.

• Modest operating profit growth expected as cost increases and declining inbound sales from China offset renovation-driven sales gains.

• Strategic investments to accelerate in overseas, high-net-worth, and customer data businesses.

• FY2026 dividend planned at JPY 48.0 per share.