Trusco Nakayama (9830) Q2 2024 earnings summary

Executive summary

• Interim net sales rose 9.2% YoY to ¥143,461 million; operating income increased 7.6% to ¥9,852 million and profit attributable to owners rose 11.2% to ¥6,745 million.

• Full-year net sales guidance was raised to ¥290,000 million, with profit attributable to owners forecast at ¥15,032 million, up 22.5% YoY; planned second-half extraordinary income supports the profit outlook.

• Growth reflected inventory, logistics and digital initiatives, with all sales routes advancing, led by e-business and overseas.

Financial highlights

• Interim gross profit was ¥30,201 million, up from ¥28,188 million; gross margin was 21.1%, down 0.4pt YoY as the benefit from pre-price-revision inventory faded.

• SGA expenses rose 6.9% YoY, mainly due to higher salaries and freight; operating expenses totaled ¥20,348 million versus ¥19,031 million.

• Ordinary income increased 7.4% to ¥9,953 million; interim EPS was ¥102.30, up from ¥91.99.

• Private-brand sales grew 3.8% YoY; interim capital expenditures totaled ¥9,868 million.

Outlook and guidance

• FY2024 forecast: net sales ¥290,000 million, operating income ¥19,112 million, ordinary income ¥19,364 million and profit attributable to owners ¥15,032 million; EPS is forecast at ¥227.96.

• Guidance was raised after H1 exceeded expectations; second-half gross profit is expected below prior assumptions due to expanded catalog production costs.

• The Orange Book is planned to expand to ~420,000 items, up ~210,000 YoY, across 12 volumes versus five previously.

• Full-year dividend is forecast at ¥50 per share, including a ¥24 year-end dividend; interim dividend was revised to ¥26 per share.

• Extraordinary income of ¥2,700 million is planned for the second half.