Meiji (2269) Q4 2026 earnings summary

Executive summary

• FY 2025 consolidated operating profit reached JPY 93.3 billion, exceeding plan, mainly due to strong pharmaceutical segment performance and cost reductions, while the food segment underperformed and China business is undergoing structural reforms.

• Core products like yogurt and chocolate performed well, but rising raw material and sales promotion costs, plus an impairment loss in China, impacted results.

• Initial targets of the 2026 Medium-Term Business Plan are unlikely to be met; focus shifts to achieving JPY 100 billion consolidated operating profit.

• Management is prioritizing accelerated transformation, portfolio optimization, agile measures, and cash utilization for shareholder returns and growth investments amid rising costs and geopolitical risks.

• Net sales rose 1.7% year-over-year to JPY 1,173.7 billion, with ordinary profit up 17.7% to JPY 96.6 billion.

Financial highlights

• FY 2025 consolidated net sales were JPY 1,173.6 billion, up 1.7% year-over-year; operating profit was JPY 93.3 billion, up 10.2%, exceeding plan.

• Profit attributable to owners fell 31% to JPY 35 billion due to impairment losses in China and special support program costs.

• EPS fell to JPY 129.42 from JPY 186.08 year-over-year.

• Major negative factors included a JPY 23 billion increase in raw material costs and higher logistics/marketing expenses.

• Free cash flow turned negative at JPY -53.8 billion due to higher capital expenditures and impairment losses.

Outlook and guidance

• FY 2026/2027 targets: net sales JPY 1,212.0 billion (+3.3%), operating profit JPY 100.0 billion (+7.2%), profit attributable to owners of parent JPY 62.5 billion (+78.2%).

• Dividend forecast for FY 2026/2027 is JPY 110.00 per share.

• ROE is targeted to recover to 8% in FY 2026, aiming for 10% longer term.

• Medium-term plan targets revised downward due to raw material costs, China slowdown, and COVID-19 vaccine market changes.