Paltac (8283) Q2 2025 earnings summary

Executive summary

• Net sales reached ¥600.4bn for Q2 FY2025, up 2.9% year-over-year, driven by increased demand from inbound tourism and consumer outings, despite persistent budget-consciousness and higher logistics costs.

• Operating profit rose 1.5% to ¥13.9bn, with profit margin slightly down to 2.33% due to higher SG&A expenses, offset by sales expansion and improved fixed expense absorption.

• Net profit grew 9.2% year-over-year to ¥11.9bn, with EPS at ¥189.50, up from ¥173.32.

• Growth in cosmetics and daily necessities offset declines in OTC pharmaceuticals and hygiene products.

• Net sales were slightly below plan (-0.6%), but operating profit exceeded plan (+0.6%) due to improved SG&A expense ratio.

Financial highlights

• Gross profit increased 2.0% to ¥44.2bn, though gross margin edged down to 7.36% due to initial food logistics costs.

• SG&A expenses rose 2.2% to ¥30.2bn, but the SG&A ratio improved to 5.03%.

• Ordinary profit was ¥16.2bn, up 3.6% year-over-year.

• Extraordinary income included a ¥1.01bn gain on sales of investment securities.

• Cash and cash equivalents at period-end were ¥62.4bn, up ¥1.4bn from March 31, 2024.

Outlook and guidance

• FY2025 guidance maintained: net sales ¥1,190.0bn (+3.3%), operating profit ¥28.0bn (+3.0%), profit ¥22.0bn (+6.6%), EPS ¥350.06 (+6.6%).

• Ordinary profit forecast at ¥31.7bn (+3.8%).

• Annual dividend forecast raised to ¥105.00 per share, with dividend per share expected to increase for the 15th consecutive year.

• Company expects continued challenges from price hikes and rising logistics costs but aims for steady sales and profit growth.