MatsukiyoCocokara & Co.（3088.JP）Q1 FY3/25 results： OP missed the consensus forecast

Investment Rating - The report assigns a 12-month investment rating of "Buy" for MatsukiyoCocokara & Co. with a price target of ¥2,960.0 [1][14]. Core Insights - The Q1 FY3/25 operating profit (OP) was ¥17.3 billion, a 1% year-over-year decline, which missed both the forecast of ¥18.7 billion and the IBES consensus of ¥18.8 billion. However, sales and gross profit exceeded expectations, while SG&A costs were higher than anticipated [1]. - The company plans to increase investment in human capital and IT for medium-term growth while maintaining OP targets. Consumption tax-free sales showed strength, increasing their share to 5.5-6% [1]. - FY3/25 guidance remains unchanged, targeting sales of ¥1,050 billion (up 3% year-over-year) and OP of ¥77.5 billion (up 2%). The IBES consensus for OP is ¥81.6 billion, indicating potential for downward adjustments [1]. Financial Forecasts - Forecast price appreciation is estimated at 30.5%, with a dividend yield of 1.9%, leading to a total forecast stock return of 32.3% [2]. - Revenue projections for FY3/25 are set at ¥1,054.6 billion, with operating profit expected to be ¥79.7 billion [1]. - The report anticipates a gradual increase in EPS from ¥128.7 in FY3/25E to ¥158.9 in FY3/29E [1]. Company Overview - MatsukiyoCocokara is a leading drugstore operator in Japan, known for its strong presence in central shopping districts and a high ratio of cosmetics and medical product sales. The company was formed from the merger of Matsumoto Kiyoshi Holdings and Cocokara Fine in October 2021 [3].