Fujiya, the confectioner, has halved its operating profit forecast for the year to December 2026, to ¥1.6bn from ¥3.2bn. The revision, published on 26 October with third-quarter results, replaces the forecast the company issued on 10 February.
The sales forecast moves less than profit: ¥123.0bn against ¥125.0bn before, down 1.6%. Ordinary profit is now forecast at ¥2.2bn instead of ¥3.65bn, and profit attributable to owners of the parent at ¥850mn instead of ¥2.1bn. Earnings per share are forecast at ¥32.98, against ¥81.47 previously.
| Measure | Previous forecast | Revised forecast | Change |
|---|---|---|---|
| Sales | ¥125.0bn | ¥123.0bn | -1.6% |
| Operating profit | ¥3.2bn | ¥1.6bn | -50.0% |
| Ordinary profit | ¥3.65bn | ¥2.2bn | -39.7% |
| Net profit attributable to owners | ¥2.1bn | ¥850mn | -59.5% |
These are cuts against Fujiya's own February forecast. Against last year's actual result, the results summary puts the new operating profit forecast 43.7% lower and the net profit forecast 58.2% lower, with sales 2.9% higher.
What management blamed
On 28 July Fujiya had left its full-year forecast untouched. It was counting on higher beverage shipments, cheaper western confectionery lines and new-format stores to bring customers back, and on steady confectionery sales from the third quarter.
That did not happen in July to September, the company says. Record long rains and heavy rain, the effects of an earthquake in Kumamoto and a further rise in consumer thrift produced purchase restraint, and sales fell short of plan. Sales ran about 6% below the original plan, Fujiya says, with high-priced western confectionery and the main large-bag confectionery products especially weak. Packaging and energy prices, which Fujiya ties to the Middle East situation, also rose by more than it had assumed.
Fujiya expects thrift in response to food price rises to persist through October to December, its peak season, with an effect on sales and profit.
The nine-month picture
The third-quarter results show a company still growing sales but not profit. Sales for January to September were ¥87.66bn, up 4.4%, yet Fujiya booked an operating loss of ¥113mn against a ¥1.07bn profit a year earlier. Ordinary profit fell 60.5% to ¥750mn and net profit attributable to owners fell 93.7% to ¥56mn.
Beverages and confectionery carried the top line. Beverage sales were 144.7% of last year's level, while confectionery segment sales were ¥63.72bn, 107.9% of last year's. Segment profit in confectionery nevertheless fell to ¥4.42bn from ¥5.72bn. Fujiya says higher raw material costs, led by cacao beans and oils and fats, and depreciation on new gummy and natural-water equipment outran its productivity gains. Depreciation for the nine months was ¥4.93bn against ¥4.05bn.
Western confectionery sales fell to ¥21.23bn, 95.6% of last year's, and the segment still lost money. Fujiya had 815 western confectionery shops, 38 fewer than a year earlier. Earlier Tokyo Brief coverage
What the new forecast needs
After a nine-month operating loss, the full-year forecast of ¥1.6bn operating profit depends on a profit in the final quarter, in which Fujiya expects thrift to continue. Management says it will use new equipment to develop western confectionery products faster and launch confectionery products aimed at specific uses. The dividend forecast is unchanged at ¥30 a share.