Welcia (3141) Q2 2025 earnings summary

Executive summary

• Net sales increased 3.2% year-over-year to ¥630.6 billion, but operating income fell 23.7% to ¥18.9 billion and net income dropped 27.8% to ¥11.7 billion due to higher SG&A and weak product sales.

• Dispensing sales grew steadily, offsetting weak product sales impacted by the end of tobacco sales and changes in point services.

• The Group expanded its store network to 2,867 stores, including new subsidiaries and a focus on PB products and loyalty programs.

• Ceased cigarette sales to promote community health and continued initiatives like cooling shelters.

• Full-year forecasts were revised downward, reflecting 1H results and continued measures for the fiscal year.

Financial highlights

• Net sales: ¥630.6 billion (+3.2% YoY); Operating income: ¥18.9 billion (-23.7% YoY); Net income: ¥11.7 billion (-27.8% YoY).

• Gross operating profit: ¥189.6 billion (+2.1% YoY); EBITDA: ¥30.8 billion (-15.8% YoY).

• SG&A expenses rose 6% YoY to ¥170.8 billion, mainly due to higher labor and advertising costs.

• Cash and cash equivalents increased to ¥82.2 billion, up ¥52.1 billion from the previous fiscal year-end.

• EPS: ¥56.65 (vs. ¥78.25 last year); comprehensive income: ¥11.5 billion (-29.9% YoY).

Outlook and guidance

• Revised full-year net sales forecast to ¥1,295 billion (+6.4% YoY), operating income to ¥34 billion (-21.4% YoY), and net income to ¥19 billion (about -29% YoY).

• EPS forecast at ¥91.72.

• Dividend per share forecast raised to ¥36.00 for the fiscal year ending February 28, 2025.

• Forecasts reflect recent M&A activity and 1H performance.