MatsukiyoCocokara & Co. (3088): Fine-tune our earnings estimates, maintain Overweight rating

Research evidence excerpt

MatsukiyoCocokara & Co. (3088): Fine-tune our earnings estimates, maintain Overweight rating

1%, reflecting steady improvement in sales per

customer and average price per item due to inflation and marketing initiatives (price

appeals), a modest downtrend in customer traffic, and a modest rise in inbound sales

(slightly above guidance for flat growth). We expect the gross margin, costs, and

other items to trend generally in line with guidance. As a result, we expect FY2026

sales to surpass guidance by more than ¥12 billion and operating profit to beat

guidance by ¥2.5 billion. We expect store openings, closures, and renovations to be

generally in line with guidance.

• Priority measures: Key strategies through FY2030 are (1) differentiation

(strengthening the platform business), (2) investment (in business infrastructure, to

enable value co-creation), and (3) social contributions and shareholder returns.

Regarding (1), MatsukiyoCocokara will utilize its 170 million customer contact

points (as of FY2025) to provide, together with its business partners, merchandise

and services that meet customer needs. In accordance with this, it aims to maximize

customer LTV and expand its B2B business fields. As contact points, the company

will leverage MatsukiyoCocokara Q (a delivery service), MatsukiyoCocokara Be (a

cosmetics recommendation service tailored to individual customers),

MatsukiyoCocokara Me (a seamless pharmacy dispensing service), and

MatsukiyoCocokara Up (a supplement recommendation service). The product

strategy is based on private-brand products, which accounted for 14.8% of sales in

FY2025. The MTP targets this ratio at over 15%, and combined with national-brand

products, the MTP calls for a good balance between attractive products,