Milling and Instant Noodles Q1 FY2027: Toyo Suisan tops profit margins
Companies compared · 3
Takeaway
Overseas earnings drove the gap in profit performance.
The milling and instant noodles group grew sales across all three companies in Q1 FY2027, but profit trends diverged. Toyo Suisan led on margin, while Nisshin Seifun's net profit fell 19.5%, highlighting overseas earnings.
Industry Trends
- All three companies reported year-on-year sales growth. Nissin led with 10.0%, followed by Toyo Suisan at 7.8% and Nisshin Seifun at 1.1%.
- Overseas operations shaped growth. Nissin expanded in the Americas and China, while overseas instant noodles lifted Toyo Suisan's profit.
- Price increases and new products also provided support. Domestic price revisions and new product launches helped Nissin grow sales in every segment.
- The weaker yen supported the yen value and profitability of overseas sales. Toyo Suisan's average dollar-yen rate was ¥159.50, compared with ¥144.60 a year earlier.
- Net profit was affected by factors beyond core operations. Nisshin Seifun's net profit fell 19.5% year on year after it no longer had the gain from selling investment shares recorded a year earlier.
Revenue Ranking
Nisshin Seifun led the three companies in revenue, while Nissin posted the fastest year-on-year growth. The leader by scale differed from the leader by growth.
Operating Profit Ranking
Toyo Suisan led operating profit, supported by price revisions for overseas instant noodles and the weaker yen. Nisshin Seifun's profit edged down despite higher sales, highlighting the earnings gap.
Year-on-Year Revenue Growth
All three companies grew sales, with Nissin posting the fastest increase. Overseas expansion, price revisions and new products supported growth, putting it ahead of Nisshin Seifun.
Year-on-Year Net Profit Growth
Nissin and Toyo Suisan recorded double-digit net profit growth, while Nisshin Seifun posted a double-digit decline. The loss of the previous year's gain from selling investment shares widened the difference.
Winner and Loser
Toyo Suisan was the winner on profit. Operating profit rose 23.4% year on year to ¥22.6 billion, the highest among the three. Its 16.6% operating margin also topped Nissin's 9.2% and Nisshin Seifun's 5.1%.
Price revisions for overseas instant noodles and the weaker yen boosted Toyo Suisan's earnings. Domestic instant noodles also posted higher sales and profit. In contrast, low-temperature foods and seafood products saw profit decline, leaving a mixed picture across businesses.
Nisshin Seifun faced the greatest challenges. Sales rose 1.1% year on year, but operating profit fell 0.9% to ¥11.2 billion. Net profit declined 19.5%, in contrast with Toyo Suisan's 19.5% increase. Weak sales of prepared foods and deli products, higher costs and the absence of the previous year's share-sale gain all weighed on results.
The three companies show that sales growth does not always translate into higher profit.
Winner
Toyo Suisan
Laggard
Nisshin Seifun
Operating Margin Ranking
Toyo Suisan's margin stood out among the three, reflecting the profitability of its overseas instant noodle business. Nissin followed, while the gap with Nisshin Seifun also reflected differences in business mix and cost conditions.
Strategic Moves to Watch
Nissin is focused on overseas expansion and product strength. Sales rose 10.0% year on year and operating profit increased 13.4%. Growth in the Americas and China, along with domestic price revisions and new products, supported its performance.
Toyo Suisan stood out for the earnings power of its overseas instant noodle business. Operating profit rose 23.4% year on year, the fastest growth among the three. Share buybacks and stable dividends are also in focus as shareholder returns.
Nisshin Seifun is looking to turn around its prepared foods and deli business. By making Tokatsu Foods a business holding company, it aims to speed up management decisions. It plans an annual dividend of ¥65, up ¥5 from the previous fiscal year.
Full-year operating profit forecasts are ¥82 billion for Toyo Suisan, ¥67.8 billion for Nissin and ¥46 billion for Nisshin Seifun. Despite its first-quarter profit growth, Toyo Suisan expects operating profit to decline for the full year. The gap between company forecasts and recent momentum is worth watching.
Risks Facing the Industry
- A reversal in the yen's direction. If the currency strengthens, it could reduce the yen value and profitability of overseas earnings that benefited Toyo Suisan.
- Higher costs for raw materials and logistics. At Nisshin Seifun, costs related to the Middle East situation weighed on profit.
- Sales trends after price increases. Price revisions support earnings, but stronger consumer thrift could hurt sales volumes.
- Shifts in overseas demand. A recovery in U.S. demand is a focus for Toyo Suisan, and regional differences in sales could affect results.
- Product competition and quality control. As competition in new products and promotions continues, food safety and stable supply remain shared challenges.
What Investors and Job Seekers Should Watch
Investors should compare operating margins and full-year plans as well as sales growth. Toyo Suisan has the highest margin among the three, but its forecast for lower full-year operating profit warrants attention. For Nissin, the focus is whether overseas growth can continue; for Nisshin Seifun, it is improving profitability in prepared foods and deli products.
For students and job seekers, differences in each company's strengths offer a starting point for company research. Those interested in overseas sales and product development can compare Nissin and Toyo Suisan, while Nisshin Seifun is relevant for those interested in businesses spanning flour milling to prepared foods. The ability to respond to changes in raw material costs and exchange rates is also important across the food industry.