Ito En, well known for its “Oi Ocha” green tea, has long been a staple for tea lovers — I even used to visit Ito En cafés every week while studying for exams. Today, the company released its financial results for the first half of fiscal 2026. While revenue has been growing steadily, profits have seen a slight decline. Here’s a clear and concise summary of the background and future outlook.
Reference materials:
Financial Results and Briefing Materials | Ito En Corporate Site
1. About the Fiscal Year
Ito En’s fiscal year ends every April.
- May 2025 – April 2026 is referred to as Fiscal 2026.
- This article summarizes full-year results for Fiscal 2025 and Q1 results for Fiscal 2026 (May–July 2025).
Fiscal years are labeled by their ending year, which helps when reviewing past reports or quarterly results.
2. Fiscal 2025 Full-Year Summary
Revenue & Profit
- Revenue: ¥472.7 billion (+4.15% YoY)
- Net Income: ¥14.156 billion (−9.55% YoY)
Reasons for Profit Decline
- Rising raw material and energy costs
- Intensified domestic market competition and consumer cost-consciousness
- Price adjustments implemented on some products, but cost increases could not be fully absorbed
3. Fiscal 2026 Q1 Results (May–July 2025)
- Revenue: ¥130.87 billion (+4.7% YoY)
- Operating Profit: ¥8.36 billion (+17.3%)
- Ordinary Profit: ¥8.92 billion (+23.6%)
- Net Income: ¥5.71 billion (+28.6%)
- EPS: ¥49.60
Revenue is steadily growing, and profits are increasing even faster, clearly showing improved earning power.
Why did profits rise so much?
Two main reasons:
- Strong demand for unsweetened tea
- “Oi Ocha” continues to drive high sales.
- Health-conscious trends and hot weather support consistent demand.
- Controlled selling and administrative expenses improved profit margins
- Effective cost management, especially in advertising, boosted profits compared to last year.
Note:
- Full-year ordinary profit forecast was revised downward from ¥26.7 billion to ¥22.4 billion
- High costs remain a challenge
4. Fiscal 2026 Full-Year Forecast (unchanged)
- Revenue: ¥490 billion (+3.7%)
- Operating Profit: ¥25.5 billion (+11.0%)
- Net Income: ¥16 billion (+13.0%)
- Annual Dividend: ¥48 (+¥4 increase)
Q1 progress: revenue ~27%, operating profit ~33% — on track with the plan.
5. Segment Trends
- Core unsweetened tea: Leading domestic market share with “Oi Ocha”
- Health-focused products: Label-free and large-size products performing well
- Overseas business: Growing in North America and Asia
6. Medium-Term Management Plan (FY2025–2029)
Growth Strategy
- Expand overseas (North America, Asia)
- Strengthen global brand recognition
- Launch new businesses (health & functional beverages, high-value teas)
Profit Improvement Measures
- Reform cost structure (logistics efficiency, optimized raw material procurement)
- Stabilize pricing adjustments
- Strengthen long-term competitiveness through ESG and sustainability initiatives
7. Domestic Beverage Market Overview
- Unsweetened drinks, especially tea, are gaining share
- Sweet and carbonated beverages show slower growth
- Health-conscious trends make unsweetened tea the default choice
- Overall market growth is limited due to population decline
- Ito En faces both tailwinds (unsweetened tea) and headwinds (market maturity)
8. Competitor Overview
Domestic Competitors:
- Suntory: Wide portfolio (tea, water, soda). Strong overall, but not tea-focused.
- Kirin: Popular brands like Afternoon Tea and Namacha. Not tea-specialized.
- Coca-Cola Japan: Vast distribution network; tea brands like Ayataka exist, but core focus is overall beverages, not just tea.
➡ Ito En’s position: Specialized in tea, maximizing expertise × brand trust.
Global Competitors:
- Asia: Local tea brands in China, Taiwan, and others. Regional taste preferences vary; localization needed. Ito En leverages strong Japanese brand image.
- North America & Europe: Health drinks, bottled water, and low-sugar beverages dominate. Matcha and green tea offer healthy image opportunities.
➡ Internationally: combining Japanese authenticity × health × unsweetened tea has significant growth potential.
9. Summary
Ito En is currently in a balanced phase of stability × growth:
- Unsweetened tea tailwind: ✅
- Overseas growth potential: ✅
- Mature domestic market: ⚠
- High costs: ⚠ (but under control)
- Domestic competitors: Many, but tea expertise remains strong
- International competitors: Diverse, but Japanese tea brand strength provides advantage
Overall, Ito En maintains its specialization in tea, enjoys stable domestic performance, and has room to grow overseas, making it a solid and strategically positioned company.
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