Eternal Hospitality Group, the Osaka-based operator of the Torikizoku yakitori chain, closed the year to July 2026 with revenue up 10.6% year on year to ¥51.3bn, but that was still 2.9% short of the company's own guidance. Operating profit fell 10.4% year on year to ¥2.8bn, missing guidance by 18.5%, and net profit attributable to owners dropped 23.4% to ¥1.3bn, a shortfall of 37.6% against plan. Management pointed to rising selling and administrative costs and a wave of new-store openings concentrated in the final quarter of the year.
| Metric | Actual | Original guidance | Year on year | vs guidance |
|---|---|---|---|---|
| Revenue | ¥51.3bn | ¥52.8bn | +10.6% | -2.9% |
| Operating profit | ¥2.8bn | ¥3.4bn | -10.4% | -18.5% |
| Net profit attributable to owners | ¥1.3bn | ¥2.1bn | -23.4% | -37.6% |
A Shanghai retreat forces an impairment
The company booked a ¥391mn impairment charge tied to some domestic outlets and a decision to close four of its seven directly run Torikizoku stores in Shanghai. Management said suburban Shanghai customers lacked awareness of yakitori as a cuisine and of the Torikizoku brand, that the stores could not meet the dinner demand of mall shoppers, and that their value for money ranked below nearby competitors. The plan for the year to July 2027 is to close those four stores while test-marketing one or two new locations in downtown Shanghai, shifting from suburban malls to city-centre sites the company argues have more purchasing power and openness to foreign food culture.
Mid-term targets cut in half
The overseas stumble forced Eternal Hospitality to cut the final-year goals of its mid-term plan. The operating profit target for the year to July 2027 was halved, from ¥6.0bn to ¥3.0bn, and the overseas revenue target was cut from ¥6.0bn to ¥2.0bn. The group's overall revenue target slipped from ¥60.0bn to ¥57.2bn, its operating margin goal from 10% to 5.4%, and its return-on-equity target from 20%-plus to 15%-plus. The company said it has struggled to establish a workable store model and product-market fit in its directly operated US and Chinese businesses, while inflation in Japan ran ahead of what the plan had assumed.
| Target | Original target | Revised target |
|---|---|---|
| Group revenue | ¥60.0bn | ¥57.2bn |
| Overseas revenue | ¥6.0bn | ¥2.0bn |
| Operating profit | ¥6.0bn | ¥3.0bn |
| Operating margin | 10% | 5.4% |
| Return on equity | 20%+ | 15%+ |
Domestic strength, and a price rise not yet in the numbers
The one clear bright spot: same-store sales at directly operated domestic Torikizoku restaurants rose 106.7% year on year, beating the company's own 103.8% target, helped by a price increase taken in May 2025 and a rolling fortieth-anniversary promotional campaign. Eternal Hospitality plans a further increase from October 2026, raising tax-included food and drink prices from ¥390 to ¥410, but because the decision came after the new fiscal year had already begun, it is not included in the guidance the company just issued for the year to July 2027. That guidance calls for revenue of ¥57.2bn, up 11.7%, operating profit of ¥3.1bn, up 10.0%, and net profit of ¥1.9bn, up 43.5%. The group also completed a one-for-two stock split effective August 1, 2026, and is forecasting a dividend of ¥23 per share, split evenly between interim and year-end payments, for the year to July 2027. Total store count reached 1,194 at home and abroad as of July 2026, with the overseas footprint expanding to 31 stores across seven countries after new entries into Vietnam and Singapore.