Hoshizaki Q2 FY2026: Revenue Jumps 14.7%, Record Sales on Overseas Growth

Hoshizaki posted record half-year revenue of ¥273.6 billion (up 14.7% year on year) for H1 FY2026. Operating profit rose 7.3% to ¥32.7 billion, while recurring profit increased 6.9% to ¥34.1 billion. Net income attributable to owners of the parent edged up 1.6% to ¥22.3 billion, reflecting higher tax costs and financing expenses. Excluding goodwill amortization and hyperinflation accounting effects, adjusted operating profit jumped 16.1% to ¥39.3 billion, highlighting robust underlying profitability.

In Japan, capital spending by the food service and hospitality sectors and the return of inbound tourism provided tailwinds. Overseas, the Americas led growth with a 29.3% revenue surge, partly thanks to prior-year acquisitions, while Europe and Asia also recorded double-digit increases. The overseas revenue share climbed to about 55.2%.

All four segments achieved revenue growth. Segment profit in the Americas declined due to goodwill amortization, but adjusted operating profit rose across all segments.

Japan sales rose 6.2% to ¥126.3 billion, driven by strong demand for refrigerators, ice makers, and dishwashers, along with robust repair and maintenance services. Labor-saving equipment demand remained high amid workforce shortages. Segment profit grew 11.1% to ¥19.5 billion.

Americas revenue surged 29.3% to ¥74.8 billion, fueled by ice maker and refrigerator sales and contribution from an acquired business. Goodwill amortization of ¥2.87 billion weighed on segment profit, which fell 16.8% to ¥4.8 billion, but adjusted operating profit soared 33.3% to ¥7.6 billion.

Europe delivered a 10.5% revenue increase to ¥30.4 billion, supported by stronger group collaboration. Hyperinflation accounting in Turkey reduced profit, but adjusted operating profit expanded 15.5% to ¥3.5 billion.

Asia sustained rapid growth, with revenue up 21.8% to ¥48.0 billion and segment profit up 25.0% to ¥8.0 billion, led by robust refrigerator demand in India.

Total assets at the half-year end stood at ¥595.2 billion, up ¥19.6 billion from end-2025, mainly due to increases in trade receivables and investment assets. Liabilities totaled ¥174.5 billion, while net assets expanded to ¥420.7 billion. The equity ratio remained healthy at 67.0%.

Operating cash flow improved sharply to ¥29.1 billion (versus ¥13.5 billion a year earlier). Investing cash flow was a ¥5.2 billion outflow, and financing cash flow an outflow of ¥30.7 billion, driven by ¥17.2 billion in share buybacks and ¥9.2 billion in dividend payments. The half-year-end cash balance fell ¥2.1 billion from year-end to ¥157.4 billion.

For shareholder returns, the interim dividend was raised by ¥5 year on year to ¥55 per share, with a full-year plan of ¥115 (including a year-end dividend of ¥60). In addition, the company executed roughly ¥17 billion in share repurchases based on a February board resolution.

Hoshizaki left its full-year FY2026 guidance unchanged from February, projecting higher revenue and operating profit but only a slight increase in net income.

Half-year progress reached 52.6% of the revenue target and 58.8% of the operating profit target, leaving room for possible upside, but the company maintained its cautious stance given global economic uncertainties.

Activist Partnership and Stock Split

After the half-year close, Hoshizaki sold 2,329,100 treasury shares (about 1.6% of outstanding shares) to Japan Activation Capital (JAC) for approximately ¥12.1 billion under a strategic partnership agreement. This brings the JAC-related fund's stake to around 2.7%, with expectations of accelerated capital efficiency and value improvement measures, which are likely to feature in the new medium-term management plan from 2027.

Furthermore, Hoshizaki will implement a 2-for-1 stock split effective January 1, 2027, doubling its outstanding shares to 289.78 million. The move aims to improve liquidity and broaden the investor base.

The company’s earnings report flagged the following external risks:

• Uncertain U.S. policy outlook: trade and interest rate moves could affect investment and consumption.
• Sluggish growth in Europe and China: demand downturns may weigh on European operations.
• Middle East geopolitical risks and energy price volatility: higher raw material and logistics costs.
• Intensifying competition: price pressure in certain markets, including the Americas, could erode margins.
• Currency swings: a stronger yen would reduce overseas earnings and assets.
• Ongoing goodwill amortization: acquisitions will continue to weigh on reported profit.

Domestically, while labor shortages and cost increases persist, capturing labor-saving demand through product development and service network strength remains key to growth.