Morinaga Milk Industry Co (2264) Q2 2027 earnings summary

Executive summary

• 1H FY2027 net sales rose 2.6% YoY to ¥300.821bn and operating profit rose 1.5% to ¥21.107bn, a record; ordinary profit fell 3.4% and net profit fell 6.6%.

• Price revisions, product mix, cost controls and overseas growth supported results, while domestic volume weakness and higher input and operating costs weighed on earnings.

Financial highlights

• 1H ordinary profit was ¥21.205bn and profit attributable to owners was ¥13.675bn; basic EPS was ¥42.36 on a post-split basis.

• Gross profit was ¥74.852bn versus ¥73.869bn YoY; SG&A was ¥53.744bn versus ¥53.064bn.

• Domestic business sales fell 2.0% to ¥248.869bn; Global Business sales rose 31.9% to ¥51.952bn.

Outlook and guidance

• FY2027 forecast: net sales ¥590bn (+3.2%), operating profit ¥39bn (+13.1%), ordinary profit ¥39.3bn (+5.9%), net profit ¥23bn (+1.8%) and EPS ¥71.24; operating profit guidance rose ¥5bn.

• Global Business operating profit forecast is ¥26bn, up ¥9bn YoY; domestic business is forecast at ¥13bn, down ¥4.5bn YoY.

• MILEI price increases are assumed to continue through December; some whey prices have eased, leaving the outlook uncertain.

• Domestic guidance reflects raw-material, energy and logistics costs and lower volumes; further price revisions remain under consideration.

• FY2029 medium-term targets include ¥630bn sales, ¥44bn operating profit, 7% operating margin, 15% Global Business sales ratio, 10% ROE and 7% ROIC.