■Performance Trends of G-7 Holdings＜7508＞

(1) Automobile-related business

Sales in the automobile-related business continued to hit record highs of 21084 million yen, up 6.2% from the same period last year, and ordinary profit also increased 47.6% to 567 million yen for the first time in two periods. Looking at each company, sales of all subsidiaries increased, with the exception of a slight decrease in sales of G-7 Auto Service. Meanwhile, in terms of profit, although G-7 Bike World saw a slight decrease in profit, other subsidiaries increased profits (or reduced losses).

As for G-7 Auto Service's performance, although sales decreased by about 1% compared to the same period last year, ordinary profit increased by 2 digits. Sales seem to have been affected by the fact that domestic new car sales volume for the same period began to decline for the first time in 2 years, down 2.6% from the same period last year, and heightened savings intentions due to rising prices. Even if we look at monthly sales trends based on existing stores, the trend of going back and forth continued after 2024/4, and there was a 1.4% decrease from the same period in the 2025/3 interim period. By category, tires increased by 7.1%, service revenue centered on tire installation fees increased by 7.5%, batteries increased by 8.3%, and accessories increased by 7.3%, respectively, while car AV fell 7.2% and automobile purchase/sales were sluggish, which was a factor in sluggish growth in all sales. In terms of profit, profit increased due to profitable tire sales and an increase in service revenue. Furthermore, there were no store openings or exits, and the number of “AUTOBACS” stores (domestic) at the end of the mid-term period remained flat at 69 stores compared to the same period last year.

Although G-7 Bike World's existing store sales increased 3.7% from the same period last year and recovered for the first time in 3 years, profit declined slightly. In addition to a slight decrease in gross margin due to discounted sales, an increase in labor costs due to hiring 13 new graduate employees was a factor in the decline in profit. The number of stores at the end of the mid-term period was 15, unchanged from the same period last year.

Among overseas businesses, G-7 Crown Trading, which carries out automobile export sales, continued to grow rapidly with a 40% increase in sales compared to the same period last year due to depreciation of the yen exchange rate, but profit remained at a 1-digit increase. The increase in the tariff rate on imported cars from China and the conversion of the exchange rate to an appreciation of the yen after August also had an impact. Meanwhile, the Malaysian subsidiary saw an increase in sales and profit (loss reduction). “Bike World” is doing well, and we are in the process of searching for new properties to open new stores. The number of stores at the end of the mid-term period remained the same as “Bike World” at 5 stores, an increase of 1 store compared to the same period last year, and “AUTOBACS” at 3 stores.

(2) Business supermarket business

Sales in the business supermarket business increased 12.7% from the same period last year to 58566 million yen, and ordinary profit increased 1.2% from the same period last year to 2,292 million yen. Existing store sales remained steady, with a 2.7% increase against the backdrop of heightened savings intentions, and sales at G-7 Supermart increased 6.4% from the same period due to the opening of 5 new stores. Additionally, the fact that Bon Sante, which has 15 stores in the Tokyo metropolitan area, became a subsidiary from 2024/7 was also a factor in the increase in sales.

In terms of profit, labor costs increased 15% due to employee treatment improvements (salary revisions, bonus increases), and although there was an increase in store renovation costs (10 stores were renewed), and Bon Sante's goodwill amortization amounts were recorded, an increase in profit was secured due to an increase in gross profit associated with the increase in sales. Note that the breakdown of the 5 newly opened stores is 2 in Hokkaido and 3 in Chubu, and the number of stores at the end of the interim period increased by 23 stores compared to the same period last year to 211 stores.

The monthly sales growth rate of existing stores compared to the same month last year has remained steady throughout the period, although there was a slight slowdown from the 2024/3 fiscal year, when price increases had an effect. The growth rate of existing stores in the entire area directly controlled by Kobe Bussan has shown almost similar movements, and it can be said that “business supermarkets” were strong nationwide.

(3) Meat business

Sales in the meat business were 10119 million yen, down 1.4% from the same period last year, and ordinary loss was 38 million yen (profit of 133 million yen for the same period last year). In addition to the rise in raw material prices from the previous year, as market conditions for imported meat generally soared due to the depreciation of the yen, sales price reviews and the switch to domestic products proceeded. However, in addition to the fact that consumers continued to be oriented towards low prices, the gross margin ratio fell by 1 point due to the fact that demand for barbecues declined due to intense heat, which was a factor in the deterioration of earnings.

Monthly sales trends at existing stores have continued to be negative compared to the same month last year since 2024/4, and there was a 4.1% decrease compared to the same period last year in the interim period. Regarding the trend of opening and leaving stores, there were 3 new stores (3 stores in Chubu) and 2 stores leaving, and the number of stores at the end of the interim period increased by 3 stores compared to the same period last year to 175 stores.

(4) Other businesses

Other businesses continued to increase sales and profits to 1,123 million yen, up 2.3% from the same period last year, and ordinary income to 179 million yen, up 77.7% from the same period last year.

By business, sales in the mini supermarket business decreased 2.1% in the same period last year due to the effects of proceeding with the consolidation of unprofitable stores in the previous fiscal year, but increased 3.2% on an existing store basis. Sales promotion measures, such as reviewing sales prices and holding fairs for region-limited products, etc., led to a recovery in sales. The number of stores at the end of the interim period was 58 stores, down 5 from the same period last year, and nearly 70% of these are still in the red, but it seems that losses have shrunk drastically.

In the agricultural business, in addition to existing store sales remaining steady, with a 4% increase from the same period last year, sales and profit also increased due to the effect of leaving 3 unprofitable stores in the Kansai area in the previous two quarters. The number of stores decreased by 3 compared to the same period last year to 20 stores. Also, in the specialty food/PB business, sales and profits increased due to efforts to develop new business partners and discover products. Handling of pet food has begun as a new product. In addition, although the number of members of the health exercise class “Curves” (25 stores) for women increased at G7 Retail Japan, profits declined due to high expenses such as relocating and renewing 2 stores and opening 1 outlet store “RJ Market” for cosmetics and daily necessities as a new business type. There is also a lack of awareness about the “RJ Market,” and it seems that they are struggling to launch, and it is necessary to strengthen promotion activities in the future.

(Author: FISCO Visiting Analyst Joe Sato)