■Earnings Forecast
1. Earnings forecast for the fiscal year ending 2025/2
Regarding the earnings forecast for the fiscal year ending 2025/2, Create Restaurants Holdings (3387) anticipates an increase in sales revenue of 153 million yen, an increase of 5.0% from the previous fiscal year, operating profit of 9,300 million yen, an increase of 31.4%, profit before income taxes of 8,700 million yen, and net income attributable to owners of the parent company to increase 21.0% to 6,100 million yen. In particular, a significant growth rate is expected in terms of profit, and adjusted EBITDA is also expected to secure 26,200 million yen.
Growth in each category contributes to sales growth against the backdrop of active domestic consumption and continued inbound demand. Existing store sales (consolidated) are expected to be 105.4% compared to the previous fiscal year. We are planning to open 30 new stores (17 stores that have left) centered on core brands, and we will continue to actively work on strategic business type changes and renovations.
In terms of profit and loss, as the severe profit environment (raw material prices remain high, labor costs rise due to labor shortages, utility costs such as electricity and gas, etc.) continues, in addition to sales revenue growth and continued cost control, the shift to a muscular cost structure progressed further through closing unprofitable stores and conservative impairment treatment, etc. carried out in the previous fiscal year, so it is expected that a significant increase in profit will be realized.
2. Our view
Even at our company, although it is necessary to continue to pay attention to an economic environment where the future is uncertain, we believe that it is quite possible to achieve the company's earnings forecast because existing stores are growing steadily and the shift to a muscular cost structure is progressing further. What is noteworthy is how the final touches will be made and connected to the next as the final year of the 3-year roadmap for a new stage of growth. In particular, with regard to existing stores, while customer unit prices are moving higher than before the COVID-19 pandemic, there is still room for improvement in the number of customers, and how it is possible to bring back customers to stores (or unearth a new customer base) will be an important theme for the restaurant industry as a whole. I would also like to pay attention to attractive business type development that captures current trends unique to the company and improvements in repeater ratios (making fans for stores) through CRM enhancements (data utilization).
(Written by FISCO Visiting Analyst Ikuo Shibata)