Suntory Beverage & Food (2587): 2Q results: Japan beat, overseas missed; achieving constant-currency guidance may be challenging

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

07 August 2026

Suntory Beverage & Food (2587)

2Q results: Japan beat, overseas missed; achieving

constant-currency guidance may be challenging

Neutral: 2Q FY2026 operating profit on an existing-business basis rose 4.5% YoY

to ¥47.8 billion, slightly above our ¥46.5 billion estimate. However, constantcurrency operating profit fell 5% YoY, below our estimate of a 2% decline. In the

overseas business, profit margins fell more than we had expected, and the business

missed our estimate. The company maintained FY2026 guidance (operating profit

of ¥163.0 billion on an existing-business basis, up 2% YoY on a constant-currency

basis). Given the progress in 1H and cost inflation from the Middle East conflict,

we will be watching whether it can meet its constant-currency guidance.

Japan: 2Q operating profit rose 27% YoY to ¥17.0 billion, above our ¥14.2

billion estimate. However, this was not really a surprise given that the main

drivers were lower advertising and general expenses. As we had estimated,

reduced rebates drove a much stronger unit price effect than in 1Q. We view this

positively as a sign that management is balancing volume and profit as cost

inflation persists.

Overseas: 2Q operating profit fell 13% YoY on a constant-currency basis to

¥38.3 billion. France was weak because of the sugar tax, but strong revenue in

markets including Vietnam, Thailand, and the UK gave some reassurance on

the demand front. However, heavier marketing spend and higher aluminum can

costs in the US resulted in lower profit across every segment and depressed

margins.

Neutral

2587.T, 2587 JP

Price (06 Aug 26):¥4,567

Price Target (Dec-26):¥4,900

Japan Equity Research

Food, Beverage, and Tobacco

Satoshi Fujiwara AC

(81-3) 6736-8652

Hideto Takahashi

(81-3) 6736-8638

JPMorgan Securities Japan Co., Ltd.