SUNDRUG (9989) 4Q FY2025: Plans to start product supply to Kirindo in May; FY2026 guidance, new MTP earnings outlook solid

Research evidence excerpt

SUNDRUG (9989) 4Q FY2025: Plans to start product supply to Kirindo in May; FY2026 guidance, new MTP earnings outlook solid

J P M O R G A N Asia Pacific Equity Research

16 May 2026

SUNDRUG (9989)

4Q FY2025: Plans to start product supply to Kirindo in Neutral

May; FY2026 guidance, new MTP earnings outlook 9989.T, 9989 JP

solid Price (15 May 26):¥3,760

Price Target (Dec-26):¥4,400

Neutral: 4Q operating profit was ¥10.3 billion, up 6.4% YoY, slightly above our Japan Equity Research

estimate as of April 10 of ¥9.8 billion and in line with the Bloomberg consensus

Retail

estimate at that time of ¥10.2 billion. Sundrug also issued FY2026 guidance and

a new medium-term plan through FY2030. It plans to start supplying products to Dairo Murata AC

Kirindo Holdings in May, and while this has long been expected to contribute to (81-3) 6736 8620

dairo.murata@jpmorgan.com

earnings, it is not factored into FY2026 guidance.

Ami Terai

• 4Q summary: Sales grew 4.3%, the gross margin improved by 0.2ppt, and (81-3)ami.terai@jpmorgan.com6736-8660

expenses rose 4.9%. Compared with our estimates (sales +3.8%, gross margin

Kazuha Matsuo +0.4ppt, expenses +6.3%), the gross margin was lower, but so were expenses.

(81-3) 6736-8614

Sales missed full-year guidance by ¥7.5 billion, and operating profit by ¥0.47 kazuha.matsuo@jpmorgan.com

billion. By segment, the drugstore (DGS) segment slightly missed operating JPMorgan Securities Japan Co., Ltd.

profit guidance after lower sales of seasonal merchandise (mainly cold

remedies) in 2H and tariffs hurt sales, while the discount store (DS) segment

exceeded profit guidance somewhat as food sales remained strong, improved

transaction terms for DGS products contributed (improving the gross margin

by 0.3ppt YoY), and utility expenses were lower than expected.