WATTS CO., LTD. (2735) Stock Price

Watts operates a nationwide chain of 100-yen shops that primarily sell everyday consumables such as stationery, cleaning supplies, kitchenware, and hygiene products. The company's core business is selling low-priced household goods through directly operated chain stores.

The primary customers are regular consumers making daily purchases, with the majority of sales coming from in-store retail. The company also engages in wholesale distribution to other retailers, securing revenue through a single business segment combining direct sales and wholesale operations.

As of August 31, 2025, the company operates 1,877 stores, with most located as tenants in shopping centers and supermarkets. Additionally, Watts operates multiple retail formats including lifestyle goods stores, discount stores, and uniform-price shops overseas. The company maintains direct supply relationships with manufacturers and wholesalers, and utilizes outsourced distribution centers to enable rapid restocking and efficient small-lot delivery.

The company aims for steady growth in sales and profits centered on its core 100-yen shop business. For the next fiscal year, the company projects consolidated sales of 63,000 million yen (up 2.3% year-over-year), operating profit of 1,500 million yen (up 5.7%), ordinary profit of 1,500 million yen (up 5.0%), and net income attributable to parent company shareholders of 900 million yen (up 3.4%). On key metrics, the company targets improving the sales-to-ordinary-profit margin from 2.4% to 5.0% over the medium term, and return on equity (ROE) from 7.1% to 10.0%. The strategy maintains the iconic 100-yen price point while improving profitability.

Priority investments focus on strengthening product offerings and expanding sales channels. The company develops high-quality household goods under its own brand, differentiating through monthly promotions and product development in collaboration with influencers. Beyond the 100-yen price point, the company introduces premium products priced above 100 yen to enhance customer satisfaction. Leveraging its store base of 1,877 locations as of August 2025, the company is strengthening online ordering and in-store pickup services to increase purchase frequency and average transaction value.

International expansion and new store formats are positioned as new growth engines. The company diversifies its domestic revenue base through lifestyle-focused new formats including "Buona Vita," "Tokino:ne," and "Real," while pursuing franchise expansion in Southeast Asia and Central/South America alongside wholesale growth with local partners. Anticipating slower domestic growth, the company aims to increase the sales contribution of new business segments and markets across the group.

Technology investments continue to drive operational efficiency and customer convenience. The company implements automated ordering systems and self-checkout to reduce labor costs and boost productivity, while direct-from-manufacturer delivery and third-party logistics centers accelerate inventory replenishment. The company also expands online shopping across the group and pursues cost management and sustainable value creation through environmental initiatives—including plastic bag reduction, LED conversion, and paperless operations—and disaster preparedness product development.