Toyo Suisan Q1 FY2027: Overseas instant noodles drive 23% profit surge

For the April-June quarter, Toyo Suisan posted revenue of ¥135,667 million, up 7.8% year on year, while operating profit climbed 23.4% to ¥22,573 million. Net income attributable to owners of the parent rose 19.5% to ¥18,230 million, and ordinary profit increased 22.0% to ¥25,090 million. The average USD/JPY rate was 159.50, sharply weaker than 144.60 a year earlier, boosting overseas earnings. The operating profit margin improved to 16.6% from 14.5%. Domestic instant noodles saw solid demand, but chilled and marine foods posted profit declines. The company maintained its full-year guidance, expecting cost savings and yen support in coming quarters.

The overseas instant noodles segment generated revenue of ¥64,372 million (+15.6% YoY) and segment profit of ¥16,941 million (+33.1%). In the U.S., sales volume was dampened by a rebound from price hike-driven demand last year, but a weaker yen and strong growth in Mexico drove the top line. Price adjustments absorbed higher packaging and imported raw material costs, significantly improving profitability. Domestic instant noodles revenue rose 6.4% to ¥25,211 million and profit grew 13.8% to ¥2,425 million, led by popular brands such as Akai Kitsune Udon and Maruchan Seimen, which offset rising material and logistics expenses. The chilled foods segment saw revenue slip 1.4% to ¥15,849 million and profit drop 27.3% to ¥1,681 million, hurt by a reversal of strong summer product demand from a year earlier and higher labor and depreciation costs. Marine products revenue fell 1.1% to ¥7,796 million with profit down 17.0% to ¥352 million, reflecting sluggish convenience store sales. Processed foods revenue declined 2.1% to ¥5,214 million, posting a ¥17 million loss, impacted by rice product price revisions. The refrigerated logistics business delivered revenue of ¥6,931 million (+3.4%) and profit of ¥940 million (+14.1%) on expanded delivery services and price hikes. Other operations, including bento and deli items, saw revenue decrease 1.2% to ¥10,291 million but profit gain 21.3% to ¥359 million.

At the end of June 2026, total assets stood at ¥644,963 million, up ¥2,085 million from March 2026, while net assets increased ¥5,038 million to ¥548,965 million. The equity ratio rose to 83.1% from 82.6%. Cash and deposits declined, but inventories and construction in progress increased. Liabilities decreased in accrued expenses and income taxes payable but rose in deferred tax liabilities. The company plans to maintain its annual dividend of ¥220 per share (interim ¥80, year-end ¥140). Following a board resolution on May 15, 2026, Toyo Suisan repurchased 390,400 treasury shares for ¥3,829 million, ending the quarter with treasury stock of ¥59,514 million. Depreciation expenses rose to ¥4,730 million, reflecting ongoing capital investment.

While the company expects a gradual economic recovery, it highlights several risk factors: geopolitical tensions in the Middle East and U.S. policy shifts affecting overseas operations; sharp currency and interest rate fluctuations driven by financial market volatility; persistently high raw material and logistics costs pressuring profitability; intense sales competition and post-price-hike demand trends, especially in the U.S.; and variable demand from convenience stores and food service channels. Toyo Suisan plans to counter these headwinds through a mix of cost reductions, strategic pricing, overseas brand strengthening, and new product launches.

Toyo Suisan left its consolidated forecast unchanged from the May 15, 2026, announcement. For the first half ending September 2026, it projects revenue of ¥274,500 million (+7.2% YoY), operating profit of ¥42,000 million (+5.6%), ordinary profit of ¥45,400 million (+3.7%), and net income of ¥33,600 million (+0.8%). Full-year FY2027 guidance: revenue ¥560,000 million, operating profit ¥82,000 million (down 4.4% vs. FY2026), ordinary profit ¥88,500 million, net income ¥65,600 million (down 6.5%). Despite the forecast implying a full-year profit decline, Q1 outperformed with strong gains, driven mainly by overseas noodles. Management called the results 'within expectations' and kept guidance steady, though sustained yen weakness and cost absorption could lead to an upside surprise.

In May 2026, Toyo Suisan announced a share repurchase plan, acquiring approximately ¥0.38 billion worth of stock during Q1. The move aims to improve capital efficiency and enhance shareholder returns, complementing the steady dividend. The full-year EPS forecast, reflecting the buyback, stands at ¥676.17 per share. With a solid financial base and equity ratio exceeding 80%, the company has ample room for additional shareholder-friendly measures, including potential dividend increases or further buybacks.