Operating Margin - Yakult Honsha Co Ltd (TSE:2267)

Watchlist Manager

Watchlist

Price: 2 498 JPY -0.08%

Market Cap: 829.3B JPY

9.7%

Current

12%

Average

5.6%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

9.7%

Operating Profit

46.9B

Revenue

485.8B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
JP		Yakult Honsha Co Ltd TSE:2267	829.3B JPY	10%
JP	G	Goyo Foods Industry Co Ltd TSE:2230	53.2T JPY	8%
CH		Nestle SA SIX:NESN	187.6B CHF	17%
US		Mondelez International Inc NASDAQ:MDLZ	66.7B USD	12%
ZA	T	Tiger Brands Ltd JSE:TBS	58.3B Zac	11%
FR		Danone SA PAR:BN	49B EUR	13%
CN		Muyuan Foods Co Ltd SZSE:002714	274B CNY	17%
US		Hershey Co NYSE:HSY	36.6B USD	17%
ZA	A	Avi Ltd JSE:AVI	34.8B Zac	22%
CH		Chocoladefabriken Lindt & Spruengli AG SIX:LISN	26.4B CHF	15%
CN		Foshan Haitian Flavouring and Food Co Ltd SSE:603288	222.5B CNY	27%

Yakult Honsha Co Ltd
Glance View

Economic Moat

None

Market Cap

829.3B JPY

Industry

Food Products

Yakult Honsha Co., Ltd., a company rooted in Japanese tradition and scientific innovation, has become a global powerhouse in the probiotics industry. The journey began in 1935 when microbiologist Minoru Shirota pioneered the development of a fermented milk drink containing a unique strain of bacteria, Lactobacillus casei Shirota. This visionary endeavor aimed to improve gut health utilizing the principles of preventive medicine, a novel concept at the time. Yakult's flagship product, a small, iconic bottle of sweet-tasting probiotic milk, swiftly captured the attention and trust of Japanese consumers, setting the company on a trajectory of continuous growth and worldwide expansion. The company leveraged its strong research foundation to consistently innovate its product offerings, ensuring Yakult remained at the forefront of the health and wellness trend. In the modern marketplace, Yakult's operations exemplify a successful case of strategic internationalization. By maintaining a robust distribution network across more than 40 countries, the company effectively taps into varying health consciousness trends across diverse cultures. Revenue is primarily derived from the sales of its probiotic beverages, which are produced through a time-honored fermentation process. Yakult has strengthened its market position through direct sales strategies, including the hallmark “Yakult Ladies,” who personally deliver products to customers, enhancing consumer engagement and fostering brand loyalty. Beyond beverages, Yakult has diversified its portfolio to include cosmetics and pharmaceuticals, though the probiotic drinks remain its core profit engine. This diversification not only draws on the company's microbiological expertise but also mitigates risk by reducing dependency on a single product line.

View Yakult Honsha Co Ltd Analysis

Yakult Honsha Co Ltd Intrinsic Value

Show

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

D	Deutsche Konsum REIT-AG XETRA:DKG	1.86 EUR 1.92%
S	SF Urban Properties AG LSE:0QN6	101 CHF -1.95%
	Gazprom PAO MOEX:GAZP	123.55 RUB -0.36%

	Johnson & Johnson NYSE:JNJ	207.99 USD 0.24%
	Berkshire Hathaway Inc NYSE:BRK.A	752 700 USD 1.03%
	Bank of America Corp NYSE:BAC	56.185 USD 0.98%
	Mastercard Inc NYSE:MA	588.7 USD 1.51%
	UnitedHealth Group Inc NYSE:UNH	346 USD 1.26%
	Exxon Mobil Corp NYSE:XOM	120.505 USD 1.7%

	Franklin Covey Co NYSE:FC	17.24 USD -3.25%
	Mohawk Industries Inc NYSE:MHK	112.33 USD 5.11%
	Ardmore Shipping Corp NYSE:ASC	11.725 USD 0.47%
	ASGN Inc NYSE:ASGN	49.94 USD 3.25%
	Skyworks Solutions Inc NASDAQ:SWKS	60.025 USD 0.34%
	Weatherford International PLC NASDAQ:WFRD	86.29 USD -0.08%

	Johnson & Johnson NYSE:JNJ	207.99 USD 0.24%
	Bank of America Corp NYSE:BAC	56.185 USD 0.98%
	Mastercard Inc NYSE:MA	588.7 USD 1.51%
	Salesforce Inc NYSE:CRM	262.99 USD -1.18%
	Abbvie Inc NYSE:ABBV	227.77 USD -2.42%
	Home Depot Inc NYSE:HD	358.34 USD 2.66%

Yakult Honsha Co Ltd
TSE:2267