Japan's Big 3 Confectionery Makers Q1 FY2027: Kotobuki leads on margins

All three companies increased revenue, with year-on-year growth ranging from 5.5% to 10.0%. Only Kotobuki Spirits exceeded the 7.0% average growth rate.

Profit trends diverged. Calbee's operating profit rose 24.4% year on year and Kotobuki Spirits' climbed 20.7%. Morinaga was the only company to post a decline, with operating profit down 13.7%.

• Price revisions supported earnings. Calbee adjusted prices and package sizes in Japan, lifting its operating margin to 7.6% from 6.4% a year earlier.
• Overseas business boosted sales. Morinaga's overseas revenue rose 47.8% year on year, increasing its share of total revenue to 18.9%.
• Inbound tourism also provided a tailwind. Kotobuki Spirits expanded sales staffing and event promotions to capture visitor demand, lifting revenue 10.0% year on year.

Kotobuki Spirits increased revenue 10.0% and operating profit 20.7% year on year. It also recorded the highest operating margin among the three, at 22.2%, combining growth with strong profitability. That was well above Calbee's 7.6% margin.

By contrast, Morinaga increased revenue 5.6% year on year, but operating profit fell 13.7%. Net profit also declined 11.7%, making it the only company among the three to report lower profits.

The difference came down to the sources of growth. Morinaga expanded sales after consolidating U.S. company MyMo, but acquisition-related costs and higher raw material prices weighed on earnings. Calbee benefited from price revisions and productivity improvements, lifting operating profit 24.4% year on year.

Morinaga broadened its foothold in the U.S. market by making MyMo a consolidated subsidiary in April 2026. Overseas revenue rose 47.8% year on year, reaching 18.9% of total sales. Acquisition costs and higher raw material prices, however, contributed to a 13.7% drop in operating profit.

Calbee proceeded with price and package-size revisions, while domestic wheat-based snacks also performed well. Higher utilization at its Setouchi Hiroshima plant improved productivity and helped operating profit rise 24.4% year on year. Overseas, the company benefited from Hodo and expanding demand in Asia and Oceania.

Kotobuki Spirits strengthened its core products and introduced seasonal offerings and new brands. More sales staff at international terminals and event promotions helped it capture inbound visitor demand. All business segments recorded higher revenue and profit, and the company left its full-year forecast unchanged.

Growth is continuing, but several factors could still unsettle earnings, particularly raw material prices, currency movements and consumers' willingness to pay.

• If raw material costs keep rising, price revisions may not be enough to absorb the increase. Higher input costs weighed on Morinaga's operating profit.
• Consumers may buy less after price increases. As Calbee revises prices and package sizes, it will need to monitor demand for individual products.
• A shift in overseas demand or exchange rates could weaken the tailwind from international expansion. With overseas revenue up 47.8% year on year, Morinaga is also more exposed to overseas markets.
• Kotobuki Spirits benefited from inbound tourism, but remains exposed to changes in travel demand.
• Integration after acquisitions and the ability to establish new products remain challenges. MyMo at Morinaga and new brands across the companies will need to deliver sustained results.

Calbee ranked first by both revenue and operating profit, with revenue up 5.5% year on year to ¥86.8 billion and operating profit up 24.4% to ¥6.6 billion.

Kotobuki Spirits led on growth instead, with revenue up 10.0% year on year and the highest operating margin among the three, at 22.2%. The leader varied depending on whether the measure was scale, growth or margin.

Net profit rose 18.6% year on year at Kotobuki Spirits and 15.2% at Calbee, while Morinaga's fell 11.7%. Investors will be watching how Morinaga balances overseas growth through acquisitions with near-term profitability.

The three companies' results illustrate the breadth of work in the confectionery industry. At Calbee, product and pricing changes, along with productivity improvements, supported earnings. Morinaga is expanding through the acquisition of overseas businesses, while Kotobuki Spirits draws strength from regional brands and sales to inbound visitors.

Growth depends not only on product development and sales, but also on overseas operations, factory management and brand building. When choosing an employer, candidates should consider not just its products, but also the markets and roles it is prioritizing.