Yellow Hat (9882) Q2 2025 earnings summary

Executive summary

• Net sales for the six months ended September 30, 2024, increased 3.5% year-over-year to ¥69,291 million, driven by strong expendable auto parts sales and increased labor income.

• Operating profit rose 2.3% year-over-year to ¥5,353 million, while ordinary profit declined 1.5% to ¥5,920 million and profit attributable to owners of parent fell 2.4% to ¥3,969 million.

• In-store sales at existing stores grew 3.8% year-over-year, with notable growth in tires, oil, and batteries.

• Comprehensive income dropped 33.8% year-over-year to ¥3,564 million.

• Store network expanded with a net increase of 5 Yellow Hat stores and 2 Kakuyasu Tire Tread stores in 1H FY24.

Financial highlights

• Gross profit increased 4.6% year-over-year to ¥30,450 million.

• Selling, general and administrative expenses rose 5.2% year-over-year to ¥25,096 million, mainly due to higher personnel costs.

• Basic earnings per share for Q2 FY24 was ¥85.86, down from ¥88.04 in the prior year period.

• Cash and cash equivalents at period end totaled ¥17,676 million, up ¥12,838 million from March 31, 2024.

• Segment profit for Automotive and Motorcycle Parts Sales Business increased 1.6% year-over-year; Real Estate Lease Business profit rose 6.1%.

Outlook and guidance

• Full-year net sales forecast remains unchanged at ¥150,000 million (+2.3% year-over-year), with operating profit projected at ¥15,000 million (+3.6%) and profit attributable to owners of parent at ¥10,500 million (+2.3%).

• Full-year basic earnings per share forecast is ¥227.12.

• Dividend forecast for FY24/FY2025 is ¥70 per share, marking the 15th consecutive annual increase.

• Management expects steady demand for winter products and continued domestic leisure demand, but notes uncertainty in personal consumption due to high prices and a weak yen.

• No changes to previously announced forecasts.