(274A) Garden - New Analyst Report 11/29

Garden expands its food and beverage business utilizing M&A, operating ramen, restaurants, steak, sushi, and other food and beverage businesses, franchise business related to owned brands, and real estate business. The company's main brands are ramen restaurant 'Ichikaku-ya' and udon restaurant 'Yamashita Honki Udon'.

Garden was established in December 2015 by the current President and CEO Ken Kawashima. Prior to founding Garden, Mr. Kawashima successfully turned around a struggling karaoke business, achieving business revitalization. Subsequently, he acquired various food and beverage outlets such as steak restaurants, gyudon (beef bowl) restaurants, and ramen restaurants, and through business restructuring, productivity improvement, and revenue structure reform, initiated a full-scale food and beverage business.

Garden operates its food and beverage business as a single segment, classifying the business into ramen business, restaurant business, steak business, meat sushi business, franchise business, real estate business, etc. The revenue composition ratio for the 24/2 period was 66.5% for the ramen business, 15.4% for the restaurant business, 9.4% for the steak business, 2.8% for the meat sushi business, 4.4% for the franchise business, and 1.4% for other businesses.

As of the end of September 2024, Garden had a total of 193 stores, including 157 directly operated stores and 36 franchise stores. The 36 franchise stores include commissioned stores for the ramen business and steak business, each with 1 store. Commissioned stores are operated independently by Garden's employees using the franchise brand's existing store operation and management system without incurring real estate or equipment costs, royalties, etc.

Garden's ramen business consists of Yokohama-style ramen brands such as 'Ichikaku-ya' and 'Yokohama Michi', Hakata Tonkotsu ramen brands 'Ichiryu' and 'Daruma Nome', and backfat soy sauce tonkotsu ramen brand 'Teraccho.', offering a wide range of ramen genres. Among them, the main brand is 'Ichikaku-ya', which had 122 stores as of the end of September 2024, including 23 franchise stores.

Garden's Yokohama-style ramen, offered by Garden, is characterized by its rich and creamy soup, along with custom medium-thick noodles that are easy to mix with the soup. Garden's soup and noodles are manufactured by Gift Holdings (Tokyo Stock Exchange Main Board: 9279), which operates Yokohama-style ramen shops such as 'Machida Shouten,' aiming for consistent taste while streamlining the cooking process at the stores. In terms of operations at the stores, they operate based on manuals created over many years of experience, allowing them to provide dishes and services of stable quality even with employees who have limited cooking experience.