Kobe Bussan (3038) Q3 2024 earnings summary

Executive summary

• Net sales rose 11.4% year-over-year to ¥377.3 billion, driven by robust new store openings and strong shipments to existing stores.

• Operating profit increased 14.4% year-over-year to ¥26.6 billion, while ordinary profit declined 3.1% due to derivative valuation losses from yen appreciation.

• Profit attributable to owners of parent fell 4.8% year-over-year to ¥14.8 billion.

• The company maintained its full-year financial forecast, citing ongoing economic uncertainties and industry challenges.

Financial highlights

• Gross profit grew to ¥44.1 billion, with gross margin improving to 11.7%.

• SG&A expenses increased 10.3% year-over-year, but the SG&A ratio improved to 4.6% due to better logistics efficiency.

• Operating margin rose to 7.1% from 6.9% a year earlier.

• Net assets reached ¥125.9 billion, with an equity ratio of 54.7%.

• Basic earnings per share for the nine months was ¥67.24, down from ¥71.04 in the prior year.

Outlook and guidance

• FY2024 full-year net sales forecast is ¥498 billion, with 75.8% progress achieved by Q3.

• Operating profit forecast is ¥31 billion (85.9% progress), and ordinary profit forecast is ¥33 billion (66.6% progress).

• Full-year net sales forecast remains at ¥498 billion, with operating profit projected at ¥31 billion and profit attributable to owners of parent at ¥21.5 billion.

• Medium-term plan targets net sales of ¥543 billion and operating profit of ¥37 billion by FY2026.

• Aims to maintain ROIC above 10% and operating margin above 10% long-term.