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Shares of Japanese fast-food restaurant operator Zensho Holdings Co. jumped on its plans to raise prices at beef bowl chain Sukiya. A target price increase by Morgan Stanley MUFG Securities Co. also helped boost the stock.
Author of the article:
Bloomberg News
Haruka Iwai
Published Nov 18, 2024 • 1 minute read
(Bloomberg) — Shares of Japanese fast-food restaurant operator Zensho Holdings Co. jumped on its plans to raise prices at beef bowl chain Sukiya. A target price increase by Morgan Stanley MUFG Securities Co. also helped boost the stock.
Zensho surged as much as 7.7% in Tokyo to its highest since November 2023. Prices will increase for about 60% of Sukiya menu items starting Nov. 22 due to a recent rise in Japanese rice prices, the Tokyo-based company said in a statement Monday. The hike comes seven months after it raised prices on higher materials, labor and energy costs.
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“With the restaurant industry, the number of customers doesn’t drop much even when prices are raised,” said Seiichiro Samejima, an analyst at Ichiyoshi Research Institute Inc. “Profits will likely increase while cost of materials is absorbed, leading to expectations its gross profit will improve.”
Zensho joins other companies including packaged food suppliers Morinaga & Co. and NH Foods Ltd. in raising their prices this year on higher costs. The pace of gains in Japan’s corporate goods prices accelerated to the fastest clip in 14 months, led by agricultural products such as rice, according to Bank of Japan report last week.
Zensho shares also gained after Morgan Stanley MUFG boosted its earnings forecast, and its price target to ¥9,700 from ¥8,700. Earnings at US-focused takeout sushi operations are growing, while its Hamazushi conveyor-belt sushi chain is expanding with a focus on China, analyst Katsumi Arai wrote in a note.
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