Zensho (7550) Q1 2027 earnings summary

Executive summary

• Net sales for 1Q FY2026 rose 16.8% year-over-year to ¥324.8 billion, driven by strong performance in core segments and new store openings.

• Operating profit increased 57.5% year-over-year to ¥24.8 billion, with profit attributable to owners of parent up 89.2% to ¥15.1 billion.

• The group opened 366 new restaurants/stores and closed 191, ending the quarter with 15,122 locations, including 8,265 franchised.

• Growth was supported by higher same-store sales and expansion in the Global Sukiya and Global Hamasushi segments.

• The business environment remained uncertain due to geopolitical tensions, U.S. trade policy, FX volatility, and weak domestic consumer sentiment amid inflation.

Financial highlights

• Cost of sales increased 13.4% year-over-year, but as a percentage of sales, it declined to 42.6%.

• SG&A expenses rose 15.2% year-over-year, but as a percentage of sales, they decreased slightly.

• Cash flows from operating activities surged 73.3% year-over-year to ¥25.3 billion.

• Comprehensive income surged to ¥21.8 billion from ¥2.2 billion a year earlier.

• Segment sales rose by ¥46.6 billion year-over-year, with Global Sukiya and Global Hamasushi contributing most of the increase.

Outlook and guidance

• Revised FY2026 full-year sales forecast is ¥1,402.0 billion, down 1.5% from the initial forecast due to an accounting policy change.

• Operating profit forecast raised by 10.9% to ¥102.0 billion; profit forecast increased by 8.0% to ¥54.0 billion.

• Full-year EPS forecast is 321.99 yen; dividend forecast raised to 80 yen per share.

• Accounting policy change in Global Prepared Food segment affects net sales presentation but not profit metrics.

• Forecasts are subject to change based on evolving business conditions.