Kobe Bussan, the Kobe-based operator of the Gyomu Super discount grocery chain, closed its third quarter with sales up 5.2% and profit down, and used the same earnings release to disclose a ¥57bn acquisition of 15 overseas in-flight catering companies completed after the quarter ended.
For the nine months to July 31, net sales rose 5.2% to ¥432.9bn, driven by new Gyomu Super openings and steady shipments to existing stores. Operating profit rose 3.2% to ¥31.3bn. But recurring profit fell 9.6% to ¥34.6bn and net profit attributable to shareholders dropped 10.9% to ¥23.4bn, pulling earnings per share down to ¥105.30 from ¥118.37 a year earlier.
| Metric | Nine-Month Result | Change YoY | Full-Year Forecast | Progress |
|---|---|---|---|---|
| Net sales | ¥432.9bn | +5.2% | ¥566.5bn | 76.4% |
| Operating profit | ¥31.3bn | +3.2% | ¥43.0bn | 72.8% |
| Net profit (parent) | ¥23.4bn | -10.9% | ¥29.5bn | 79.2% |
Kobe Bussan attributes the profit decline chiefly to a currency-hedging base effect: this year's yen-forward contracts again produced a gain, but last year's period included a much larger valuation gain on the same hedges, making the comparison unfavorable. Selling, general and administrative costs also rose 12.9% to ¥21.7bn, partly on temporary outsourcing fees tied to the company's acquisition program.
Full-year guidance is unchanged: sales of ¥566.5bn, operating profit of ¥43.0bn and net profit of ¥29.5bn, tracking at 76.4%, 72.8% and 79.2% of target.
The core chain reached 1,144 stores at the end of July, a net gain of 22 over the nine months, or 68.8% of the company's target of 32 net openings for the year. Gyomu Super segment sales rose 5.0% to ¥415.8bn. The smaller food-service segment, which includes the Kobe Cook World Buffet chain and the Premium Kalbi barbecue format, grew sales 13.3% to ¥13.8bn.
Kobe Bussan also disclosed a material subsequent event: on August 3, after the quarter had closed, it completed the purchase of 15 in-flight catering companies grouped as LSG Asia-Pacific, executed through a joint venture called MEAL HUB set up with a Japanese restaurant and catering operator that also runs an in-flight catering business. The cash consideration was €307mn, recorded as ¥57.0bn. Ownership stakes vary by company, from 100% in most cases to 86.9% in LSG Holding Asia and just 49% in Siam Flight Services. Because the deal closed after the July 31 cutoff, none of the acquired companies' results appear in the nine-month figures reported here; the MEAL HUB joint-venture vehicle itself was newly consolidated during the period, adding ¥14.5bn of non-controlling interests to the balance sheet.
The company frames the catering purchase as a way to extend a private-label supply chain built on in-house factories and roughly 600 overseas manufacturing partners into a business it has never run before. It plans a ¥32 per-share dividend for the year, up ¥2 from the ¥30 paid last year.