ITO EN's operating profit for the quarter through July rose 22% to ¥10.2bn, even as the company left its full-year outlook exactly where it was three months ago. That gap between a strong opening quarter and an unmoved annual plan is the story here.
Consolidated sales rose 3.3% to ¥135.18bn in the three months to July 2026, and net profit attributable to shareholders climbed 14.8% to ¥6.56bn. Management credited price increases pushed through in Japan and overseas, tighter promotional spending, and a lighter depreciation bill after last year's writedown on vending machines.
| Metric | Q1 (May-Jul 2026) | Q1 YoY | Full-Year Plan | Plan YoY |
|---|---|---|---|---|
| Net sales | ¥135.18bn | +3.3% | ¥500bn | +0.4% |
| Operating profit | ¥10.2bn | +22.0% | ¥20bn | -7.8% |
| Net profit (parent shareholders) | ¥6.56bn | +14.8% | ¥11.43bn | +229.7% |
Yet ITO EN kept its full-year forecast exactly as issued on June 1, 2026: sales of ¥500bn, up 0.4%; operating profit of ¥20bn, a planned 7.8% decline; and net profit of ¥11.43bn, up 229.7% on last year's low base. A quarter that already delivered ¥10.2bn toward that ¥20bn full-year operating-profit target, with the guidance untouched, leaves the shape of the remaining nine months an open question.
Where the growth actually came from
The core parent company shrank. ITO EN's standalone (non-consolidated) sales fell 6.4% to ¥87.35bn, though standalone operating profit still rose 13.9% to ¥6.55bn as margins improved. The lift in the consolidated numbers came mostly from group companies. Domestic group businesses, including Tully's Coffee and the tea-leaf subsidiaries, grew sales 61.6% to ¥50.0bn with operating profit up 52.2% to ¥2.17bn; overseas group operations grew sales 29.3% to ¥21.6bn with profit up 30.7% to ¥1.34bn.
By reporting segment, the leaf-drink business, which covers Oi Ocha and other bottled tea, posted sales of ¥120.63bn (up 2.7%) and profit of ¥8.99bn (up 23.5%), helped by the vending-machine depreciation relief and by folding the group's vending operations into a new unit, ITO EN Neos, in May 2026. The food-service segment, which includes Tully's Coffee, grew sales 8.4% to ¥12.41bn and profit 9.3% to ¥991mn; Tully's Coffee itself ended July with 855 stores, five more than at the prior fiscal year-end.
The catch
Demand was not uniformly strong. Rainy-season weather, cooler mornings and evenings, and the price revisions themselves dampened thirst-driven demand in June and July, even after a hot May had lifted barley tea sales. Company volume data for the quarter show barley tea up 10% but green tea down 9%. Rising raw-material and packaging costs also cut into the improvement, by the company's own account.
Total assets rose to ¥370.19bn and the equity ratio slipped to 48.7% from 51.4%, as short-term borrowings jumped from ¥6.0bn to ¥14.3bn and trade payables rose to ¥48.77bn during the quarter. ITO EN offered no fresh comment on why a 22% quarterly profit gain hasn't yet moved its own full-year plan.