(274A) Stock Price

Garden acquires and revitalizes unprofitable companies through M&A, operating restaurant chains through both company-owned and franchise locations. The company operates diverse restaurant formats including ramen and udon, as well as steakhouses and sushi restaurants as core businesses, while also providing real estate brokerage and franchise headquarters functions.

The company's customer base centers on young people and families who dine regularly, as well as occasional diners, with customer spending distributed across different price points by format to stabilize customer traffic. Revenue is primarily driven by restaurant sales, with the ramen business accounting for approximately 67% in the fiscal year ending February 2025, and the flagship Ikkakuya brand alone generating approximately 63% of total sales. The company operates 195 total locations as of February 2025, including 161 company-owned and 32 franchise stores, with a notably high company-owned ratio.

Business segments include the ramen business (Ikkakuya and others), restaurant business (Yamashita Honki Udon and Hawaiian restaurants), steakhouse business, sushi business, franchise business, and select real estate operations. Through M&A and format conversion, the company leverages operational manuals and human resource development systems to enhance store profitability, achieving revenue growth through existing store utilization, low-investment openings, and rapid payback periods (Ikkakuya averaging 20 months, Yamashita Honki Udon averaging 18 months) to drive further expansion.

The company has positioned "improved profitability and stable expansion" at the core of its growth strategy, targeting operating profit margins, ROA, and ROE of 10% or above respectively. Specifically, the company leverages its store network and expertise gained through 12 M&A transactions since its founding, operating a total of 195 stores as of February 2025—161 company-operated and 32 franchised locations. Its flagship brand Ikkakuya generates approximately 10.26 billion yen in sales, serving as a major pillar of group revenue, while Yamashita Honki Udon contributes approximately 2.36 billion yen. The company pursues a strategy of enhancing profitability at existing stores while accelerating growth through new openings.

Priority investment areas are brand strengthening and operational efficiency improvements, with the company investing in QSCA (Quality, Service, Cleanliness, Atmosphere) enhancements. Specific initiatives include renovations of existing stores to reduce employee labor and improve service speed, strengthened hygiene management systems, and rigorous employee health protocols. The company differentiates itself by continuing to open locations at major terminal stations with daily passenger traffic exceeding 200,000. Additionally, synergies with its real estate business provide competitive advantages in location acquisition speed and cost through direct access to REINS and early acquisition of unlisted properties via its own website.

Market expansion and business growth are pursued through two pillars: M&A and franchising. The company shortens time and investment from property acquisition to opening by converting acquired company stores to its own brands, while simultaneously developing food court locations and street-front stores in commercial districts. International expansion is underway, with existing operations in Malaysia and Thailand, and Yamashita Honki Udon franchise recruitment launched in March 2024. The company targets store expansion in the near to medium term through increased domestic and international franchisees and strengthened retention of existing franchisees. The company maintains a target payback period of approximately 20 months for Ikkakuya and 18 months for Yamashita Honki Udon.

On the technology front, the company focuses on digital customer engagement and operational efficiency. It has expanded its membership base through smartphone app utilization, with app downloads exceeding 580,000 as of February 2025—surpassing 440,000 for Ikkakuya alone. The company drives repeat visits through loyalty points (10 points earn one free bowl of ramen) and push notifications. By accumulating and analyzing visit data, it implements demographic-targeted promotions (73.9% of Yamashita Honki Udon customers are age 30 or under) and combines digital stamp programs, contactless operations for infection prevention, and rooftop 3D vision advertising technology to strengthen brand awareness and visit motivation.