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Thank you very much for your continued support.

We would like to report on the financial results for the FY2024 and the progress of business strategies announced on February 13.

FY2024 Business Results Overview

For the January-December 2024 period, revenue was 401.1 billion yen (up 46.3 billion yen year on year), operating profit was 24.2 billion yen (up 12.5 billion yen year on year), and net income was 14.0 billion yen (up 9.2 billion yen year on year), an increase in both revenues and profits. Promotion of store-centered management and menu and promotion measures capturing consumer needs were effective, and sales at existing stores were strong, increasing to 111.6% year-on-year. Carefully selected and strategically implemented new store openings and brand conversions also contributed to increased profits.
Our main financial indicator, ROE, improved from 3.0% in the previous year to 8.3%, exceeding the minimum target of 8% cost of capital. 

Business Environment 

Inflationary conditions are expected to continue. In particular, since last year, there has been a significant rise in the cost of ingredients, especially rice, and we are expecting the impact of inflation in 2025 to be around 11.2 billion yen. The trend towards selective consumption (polarization of consumption) is becoming increasingly pronounced, and there is a need for businesses to create even better value for money. In response to the rising cost of raw materials, we will continue to conduct cross-divisional projects to reduce costs, diversify our suppliers, further improve the efficiency of production and logistics, review our ingredients and recipes, and reduce food loss, in order to keep raw material costs down. We will also improve the sophistication of our menu and promotion measures, enhance the our services and quality in our stores, leading to increased customer satisfaction and higher guest counts and average checks. 

FY2025 Guidance

The three-year medium-term management plan from 2025 that we formulated last year is progressing smoothly. In view of the business environment discussed earlier, we have set the following guidance for the current fiscal year, with the aim of further improving earning power through initiatives to improve group-wide productivity and increase the guest counts and average checks. The guidance targets are revenue of 445.0 billion yen (an increase of 43.9 billion yen compared to 2024), operating profit of 25.0 billion yen (an increase of 0.8 billion yen compared to 2024), net income of 14.8 billion yen (an increase of 0.8 billion yen compared to 2024), and ROE of 8.3%.

■Progress of Business Strategies■

Growth of Existing Stores

Operational Strategies

We have been working to increase sales and improve our profit margin by introducing additional working hours during peak customer store visit times such as weekends. We have also visualized the time taken for table setting after a customer leaves the store (cleanup time, CU time) with data, and efforts are being made at all stores (*) to reduce CU time, thereby increasing guest count by increasing turnaround. This year, we will seek to further improve productivity by starting a project focused on improving the efficiency of kitchen work. We are also working to systematically improve operations and services through digital transformation (DX), leading to increased customer satisfaction and improvements in profitability.

*Stores that have introduced table order tablet devices (around 2,500 stores)

Menu and Promotion Strategies

In order to respond to the discerning choices of our increasingly polarized customers as prices continue to skyrocket, we are working to enhance our super-value menu items for everyday use, while at the same time enhancing our menus with meals that offer the unique value of eating out.
In terms of promotions, the number of members (users) of the Skylark app reached 11.58 million by the end of last year, and the positive effect of app coupons is increasing. At Gusto, we have strategically introduced regional pricing, and it has now become possible to change the discount amount more dynamically for coupons for which the amount was previously the same after discounting. The impact of rising prices has led to a decline in the frequency of store visits by customers in outlying regions. We are working to recover guest counts by expanding the range of super value menu items as mentioned earlier, and increasing discount rates for regional prices through dynamic coupons. Going forward, we will further refine our dynamic coupons and aim for more efficient operation by issuing coupons separately by prefecture and by individual store.

Brand Conversions and Store Remodeling

In 2024, we carried out brand conversions at 64 stores. At 55 restaurants operated by Skylark Restaurants, the sales growth rate was 147%. In addition, the effect of eliminating cannibalization was +6%, contributing to an increase in revenue across areas with converted and neighboring stores. After 87 store remodelings, 69 of the restaurants in the Skylark Restaurants chain have seen a 5% increase in guest counts.
We are planning around 60–70 brand conversions in 2025. We plan to significantly expand our investment in store remodelings to around 230–240 stores, and hope to further increase the positive effects on guest count.

New Store Openings

In 2024, we carefully selected locations for 43 new stores, primarily in urban areas and near train stations. (This includes 12 stores overseas.) The performance of new stores (*) was strong, with sales of 126% compared to existing stores and a profit margin of +7%, contributing to operating profit of 600 million yen.
Our medium-term management plan includes opening a total of around 130 new stores per year (including both Japan and overseas) from 2025 onwards. However, due to the rising cost of construction materials, etc., the number of new stores opened is expected to be around 80–90 this year, with a projected contribution to sales of 7.2 billion yen and operating profit of 100 million yen.

*Skylark Restaurants stores.

M&A

Sukesan Udon—which joined the Group in October of last year—opened its first Kanto branch, the Yachiyo branch, in December. It has become a very popular restaurant, with an average daily turnover of 2 million yen. The Ryogoku store will open on February 24. We also aim to achieve efficient store operation and greater efficiency throughout the entire Group by utilizing our supply chain infrastructure, including our own factories and distribution network, while protecting the quality of our products and services. We are planning to open 21 new stores in 2025, while continuing to lay the groundwork for further store expansion from 2026 onwards. (Twelve stores will be store conversions from existing Skylark brands).
We also welcomed the Muslim-style shabu-shabu restaurant Suki-ya to Malaysia in December of last year. This is a popular business model that is strongly supported by Muslim customers, whose income levels have risen due to economic development. There are still not many restaurants in Malaysia catering to the Muslim population, which makes up 60% of the country's overall population, so we regard this as a blue ocean market. We currently have 13 stores, and we are planning to open three more stores in 2025. In the future, we also aim to expand into Muslim markets in Indonesia and other countries, in addition to Malaysia.
Going forward, we plan to continue actively pursuing business opportunities that will have high synergistic effects with our Group, both in Japan and overseas.

Enhancement of Human Capital: Store-Centered Management

In 2024, we worked to implement a major shift from our previous cost-reduction-focused management to a store-centered management model. We have introduced a performance incentive system and are revising the evaluation system to systematically help store managers to run their stores independently and reach objectives. We are enhancing our education and training systems to improve employees’ skills based on their individual capabilities. We are also engaged in various efforts to raise employee motivation and sense of belonging, such as base pay increases for full-time employees and hourly pay reviews for part-time employees. From this spring, we will also be making major revisions to our personnel system for full-time employees, and promoting the development of highly specialized human resources. In addition to highly skilled store managers and data analysts at head office we will create high-level expert positions, and encourage employees to improve their skills by increasing their salaries in line with their skills development. In the future, I believe that the transition to a group of highly-skilled professionals will lead directly to the strengthening of our management capabilities.
In response to the issue of securing human resources, we have released a new system called the "Spot Crew System," utilizing digital technologies. This is an innovative system that simultaneously meets the needs of our 100,000 part-time staff, who want to work in their spare time, and the needs of store managers when they are short of staff. In the future, we will accept registrations from members of the general public and widely recruit applicants who want to work flexibly at our Group stores, further strengthening our ability to secure necessary human resources.
The improvement of employee satisfaction and development which will be achieved by investing in human capital will be the source of the Company’s growth. We will increase our investment in human resources.

Advancing DX

We continue to drive development efforts for DX to further improve the convenience of customers and the productivity of employees.
In December of last year, we released a service for customers to pay their bills at the table using the Skylark App. This also enables QR/barcode and credit card payments, helping to eliminate waiting times for bill payment, and we have received a lot of positive feedback from customers. In January we also started issuing electronic receipts, which had been requested by many customers. This has increased convenience for customers, while also contributing to environmental conservation and cost reductions through the reduction of paper use.
As part of our efforts to improve the efficiency of back-office operations at our stores, we have also introduced a system for automatically scheduling work shifts. We have changed to a mode of operation in which store managers check and adjust work schedules that are generated automatically from information entered by part-time workers using their own smartphones. This has led to a significant reduction in working hours compared to the previous paper-based system.
We are also continuing DX activities at our head office in the form of our "Problem Task Force." Since its launch in 2022, it has handled a cumulative total of over 300 cases solving various problems in daily operations, including the active use of generative AI to check menu books and summarize inquiries to head office, contributing to improved productivity. The IT skills improvement study groups set up voluntarily within the company as a result of the head office's DX promotion efforts are spreading, and many people are now acquiring IT-related qualifications.

Promotion of ESG Initiatives

Our Sustainability Committee—chaired by the President, with the participation of Group management executives, under the supervision of our Board of Directors—plays the central role in building an ESG promotion system that is integrated with management.
We have set a target of reducing our environmental impact to 50% (compared to 2018) by 2030, and are engaged in initiatives to achieve targets in areas such as decarbonization, measures to reduce plastic waste, and reducing food loss. We monitor the progress of each initiative by setting KPIs, such as the introduction of solar power generation, the reduction of single-use disposable plastic items, and the reduction of leftover food. In decarbonization, we have now completed the introduction of solar power generation systems at two of our factories and 164 stores. A number of initiatives—such as proactive disclosure of environmental data and strengthening of our organizational structure for promoting ESG activities—have been recognized externally, and major ESG scores have been increasing year by year. Recently, we were recognized as a double "A List" company for the first time by CDP, an international nonprofit organization, as a company with A List ratings (the highest CDP rating) in both the Climate Change and Water Security categories. We were also selected for the first time as part of the Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific), a global ESG investment index, and received high recognition as the world No.2 ranked company in the restaurant and leisure sector.
We are also actively engaged in activities that contribute to local communities, such as fundraising and support activities in the event of natural disasters such as earthquakes and typhoons, support activities for children's homes, little league sports activities, and various other activities.
Going forward, we will continue to fulfill our mission as a restaurant company that provides food, and contribute to the creation of a sustainable society through initiatives for the global environment and local communities.

We ask for the continued support of all our stakeholders moving forward.

Makoto Tani  Chairman and CEO
Minoru Kanaya  President and COO
SKYLARK HOLDINGS CO., LTD.
February 13, 2025

FY2024 Skylark Financial Presentation Material