Balanced risks, sustained growth visibility

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Balanced risks, sustained growth visibility

Macquarie Equity Research Food & Life

Domestic resilience, overseas outperformance

• We view Food & Life Companies’ recent trading as resilient, with May delivering solid sales

growth despite a high base, reinforcing confidence in a strong contribution from the peak

July–August season supported by heat-driven demand and leisure traffic. While customer

traffic gains are increasingly skewed toward lower-priced peers in Japan’s conveyor-belt

sushi market - highlighting elevated consumer price sensitivity - we believe Sushiro’s data-

driven merchandising will enable agile SKU mix optimisation to sustain margins.

• That said, rising raw material costs remain a key watchpoint, particularly for mass-market

items such as yellowfin tuna, squid, and mackerel, which have historically supported gross

margins; peer price hikes underscore this pressure. Nevertheless, we expect the company’s

scientifically grounded merchandising approach to mitigate downside through flexible

pricing and mix control.

• Overseas, the earnings profile remains compelling: Taiwan has successfully reinvigorated

growth through digital initiatives, while China and Thailand continue to deliver a rare

combination of rapid unit expansion and high EBITDA margins, with new store openings

directly translating into profit growth.

• Regarding the potential consumption tax cut on food under discussion for April 2027, we

understand that subsidies for the dining-out sector are being considered in parallel, and

therefore assume a broadly neutral impact at this stage.

Earnings changes

We revised FY9/26–28 forecasts: sales +11.2-22.0% and OP+21.1-38.4% vs. prior. We raise

our assumptions for sales per store in Japan as well as in China and Thailand by around