Welcia (3141) Q1 2025 earnings summary

Executive summary

• Net sales rose 2.2% year-over-year to ¥304.7 billion, but operating income fell 25.5% and net income dropped 44.9% due to higher costs, lower customer traffic, and tax reform.

• The group opened 18 stores and closed 11, totaling 2,832 stores, with 2,167 having dispensing pharmacies as of May 31, 2024.

• Private brand sales grew 10% year-over-year, with new product launches and expanded SKUs.

• Acquisitions included Exchange Co., Ltd., Towoshiya Pharmacy Co., Ltd., and Xchange Inc.; further M&A activity is planned.

• Plans to cease cigarette sales by February 2026 as part of health initiatives.

Financial highlights

• Net sales: ¥304,734 million (+2.2% YoY); operating income: ¥5,497 million (−25.5%); net income: ¥2,824 million (−44.9%).

• Gross operating profit increased 1.4% year-over-year to ¥89.0 billion, but fell short of plan.

• EBITDA declined 14.4% year-over-year to ¥11.4 billion.

• EPS for the quarter was ¥13.67, down from ¥24.56 a year earlier.

• Comprehensive income fell 48.1% year-over-year to ¥2,676 million.

Outlook and guidance

• FY2025 full-year net sales forecast at ¥1,287.0 billion (+5.7% YoY), operating income ¥47.0 billion (+8.7% YoY), net income ¥27.0 billion (+2.1% YoY), EPS ¥130.69.

• Existing-store sales expected to grow 3.9% for products and 2.7% for dispensing.

• 102 new store openings planned, with 81.7% of stores to have dispensing pharmacies by year-end.

• Dividend per share forecast raised to ¥36.0.

• No change to previously announced financial results forecast.