Yamazaki Baking (2212): Japan F12/26 3Q Results: Somewhat Negative; Volumes after Price Hikes More Important

Share price implications: Given recent share price gains and the absence of upward revisions, we expect a somewhat negative reaction. Parent results (excluding Daily Yamazaki) were better than expected, supported by a strong top line (3Q sales of bread products rose +7%). However, earnings from Fujiya and Daily Yamazaki were weaker than we anticipated. At Daily Yamazaki, customer traffic slipped following an increase in unit prices. Measures to bring customer numbers back up, such as price reductions for onigiri rice balls and other products, may be needed. We think the price hikes announced for January are already factored in. Reason for price hikes: Yamazaki Baking announced price increases for bread products and Japanese- and Western-style confectioneries that will go into effect from Jan 1, 2027. The affected products include 48 out of 100 types of bread, 169 of 550 types of sweet bun products, and 59 of 350 types of Japanese- and Western-style confectioneries, with an average pric