(7698) ICCO - New Analyst Report 7/5

◆ Company Overview
・ICCO is engaged in food wholesaling (frozen business) and operating food supermarkets (supermarket business) specializing in ice cream and commercially available frozen foods.

◆ Financial results for the fiscal year ending March 24
・The financial results for the 24/3 fiscal year were net sales of 50,498 million yen (up 12.5% from the previous fiscal year) and operating profit of 452 million yen (up 285.9% from the same period). The supermarket business continued to struggle, but the frozen business performed better than expected against the backdrop of price increases and an increase in new store openings by client companies, resulting in an increase in profit that greatly exceeded the initial plan.

◆ Earnings forecast for the fiscal year ending 25/3
・Regarding financial results for the 25/3 fiscal year, ICCO plans sales of 54,000 million yen (up 6.9% from the previous fiscal year) and operating profit of 500 million yen (up 10.5% from the same period).
・The Securities Research Center (hereafter, the Center) predicted sales of 54,921 million yen (up 8.8% from the previous fiscal year) and operating profit of 535 million yen (up 18.3% from the same period) for the 25/3 fiscal year. It is assumed that demand will continue to increase against the backdrop of increased store openings by client companies in the frozen business. A profit increase rate exceeding the company plan was predicted, assuming a reduction in the deficit in the supermarket business.

◆ Future highlights
・Our center predicted sales to increase 6.0% from the previous fiscal year for the 26/3 fiscal year, 5.8% increase for the 27/3 fiscal year, 1.2% for the 26/3 fiscal year, and 1.4% for the 27/3 fiscal year. Note that new store openings in the supermarket business after the 26/3 fiscal year are not factored into this forecast.
・For the time being, I would like to focus on the continued growth of the frozen business against the backdrop of new store openings by client companies. Also, the focus will be on whether the supermarket business, which is expected to remain in deficit in the 25/3 period, will recover a surplus in the 26/3 period (balance of balance is balanced in the 26/3 period at our center). Also, I would like to pay attention to how far the frozen specialty store business, which began in the 23/3 period, will expand in the medium term.