[Summary]
NATTY SWANKY Holdings (7674) is a restaurant company that operates ``Gyoza Gyoza Dandadan.'' Although brand recognition is high, in the fiscal year ending January 2026, sales worsened to 7.683 billion yen, operating loss was 503 million yen, and final deficit was 930 million yen.
What the market sees is not just a deficit. The question is whether Danda Dan's low-priced, high-rotation, gyoza izakaya model will hold true in an inflationary environment of high raw material, labor, and utility costs.
The company's plan for the year ending January 2027 is sales of 8 billion yen, operating profit of 40 million yen, and final profit of 10 million yen. Although the company is aiming to become profitable, investors are still skeptical. In order to return from an operating deficit of more than 500 million yen to an operating surplus in one year, the company must improve existing store profitability, maintain customer numbers after price increases, liquidate unprofitable stores, and monetize franchise and external sales.
7674 is now seen as a profit-making company rather than a popular brand company.
First, the conclusion
The reason 7674 is weak is not because sales growth has stopped.
Sales are increasing.
The problem is that profits are collapsing.
Sales for the fiscal year ending January 2026 were 7.683 billion yen, an increase of 6.8% from the previous fiscal year. On the other hand, the operating profit and loss was a deficit of 503 million yen, and the final profit and loss was a deficit of 930 million yen. Even if sales increase, there will be no profit left. As a restaurant stock, this is a pretty tough situation.
What the market is doubting is not Dandadan's brand power itself.
Dan Da Dan is still known. Gyoza and sake, lunch, takeout, looks great on SNS, and has a mass atmosphere that is easy to enter. I don't think the lifespan of the business has completely run out.
However, what is being asked now is something else.
Will this model be profitable under inflation?
This is the biggest issue with 7674.
Quite heavy financial results for the fiscal year ending January 2026
First, check the numbers.
| Item | Results for January 2026 | Comparison with previous period |
|---|---|---|
| Sales | 7.683 billion yen | +6.8% |
| Operating income | -503 million yen | Falling into the red |
| Ordinary profit | -516 million yen | Deficit |
| Net income attributable to owners of parent | -930 million yen | Expanding deficit |
| Operating profit margin | -6.5% | Deterioration |
| Operating CF | 0.02 billion yen | Almost zero |
| Cash and cash equivalents at the end of the period | 650 million yen | Decrease from the end of the previous period |
Based on sales alone, it appears to be a growing company.
However, the operating profit margin was -6.5%. Net assets decreased from 2.273 billion yen to 1.318 billion yen, and the equity ratio also fell from 55.3% to 41.6%.
Furthermore, the financial results briefing materials show an impairment loss of 300 million yen. There were also 10 store closures, and the number of stores at the end of the period decreased from 142 to 133. Directly managed stores range from 105 to 98 stores, and FC stores range from 37 to 35 stores.
In other words, rather than the store opening phase of a growing company, the company is now in the post-store review phase.
This is where the market weighs heavily.
Why did profits collapse?
Dan Da Dan's basic model is dumplings, sake, high rotation, and mass prices.
This model was strong in a deflationary environment. The cost of gyoza is easy to read, the company uses alcohol to make gross profits, and the small store increases turnover. It's easier to get into than an izakaya and brighter than a local Chinese restaurant. It is easy to attract young people and female customers.
However, the premise of the eating out environment in 2025-2026 has changed considerably.
| Cost Item | Impact on 7674 |
|---|---|
| Pork, wheat, oil | Pushing up gyoza costs |
| Utility expenses | Pressure on kitchen, air conditioning, and store operations |
| Personnel costs | Fixed costs of store operations increase |
| Recruitment and training costs | Securing store managers and late-night staff is difficult |
| Repair costs | Need to update air conditioning and equipment in aging stores |
| Depreciation | Store openings and renewal investments reduce profits |
Company materials also show increases in utility costs, depreciation costs, repair costs, communication costs, and consumables costs. SG&A expenses were 105.2% of the plan, with personnel expenses accounting for 46.7% of SG&A expenses.
The scary thing about eating out inflation is that raising prices will not solve the problem.
Customers at gyoza bars are highly price sensitive. If you raise prices, you are likely to lose customers. If we do not raise prices, we will remain in the red.
This is a typical eating out inflation hell.
Side effects of store opening strategy
Another problem is the side effects of the store opening strategy.
A restaurant chain looks like a growing company when it is opening stores.
Sales will increase. The number of stores will also increase. Awareness also spreads.
However, a few years later, a problem arises.
- Shortage of human resources
- Shortage of store managers
- Lack of education *Lower quality of location
- Profitability difference by store
- Variation in brand experience
- Repair/renewal burden
It looks like 7674 has also entered that phase.
In the fiscal year ending January 2026, the company closed 9 directly managed stores and 1 franchised store, for a total of 10 stores. Only one new store was opened.
The company is currently in the process of liquidating unprofitable stores from the store network it has built up in the past.
This isn't all bad. Closing unprofitable stores is necessary for rebuilding.
However, the market will change its perspective here.
Rather than looking at it as a "growth chain," we see it as a "rebuilding company that is experiencing a slowdown in store openings."
It is natural for stock prices to become heavier.
Brand power still remains
It's best not to be too pessimistic here.
Dandadan is more than just a gyoza restaurant.
It's somewhere between a pub and fast food.
This position isn't bad.
- Easier to get into than local Chinese restaurants
- Easier to understand the purpose of use than a pub *Available for lunch
- Easy to take out
- There is a signature product called gyoza.
- Compatible with SNS and anime collaborations
In fact, in the explanation materials for the fiscal year ending January 2026, it is said that about 80% of survey respondents visited the store for the first time due to the collaboration with the TV anime "Danda Dan". It is also explained that directly managed store sales achieved the highest monthly sales ever in December.
In other words, the brand is not completely consumed.
What the market has doubts about is profit margins, not brand power.
Gyoza market is strong, gyoza izakaya are suffering
I would like to consider this separately.
Dumplings themselves are quite strong foods.
cheap. I feel full. Highly suitable for freezing. You can also get protein. This can be done both at home and when eating out. Easy to expand overseas.
However, ``Gyoza Izakaya'' is not in the easiest place in the Gyoza market.
| Winner candidates | Strengths |
|---|---|
| Osho | Price, recognition, cooking operations, comprehensive menu |
| Frozen dumplings | Household demand, shelf life, price competitiveness |
| Specialty stores | Branding, high unit prices |
| Chinese chain | Comprehensive menu capabilities, family demand |
| Gyoza bar | Bar demand, night demand, turnover rate |
Currently, the fried gyoza market is entering a culling phase.
Ordinary gyoza bars are tough.
To win, it is necessary to either overwhelm with low prices, increase unit prices with brands, or generate revenue outside of stores through manufacturing and external sales.
Dan-da-dan has a hard time staying in the middle.
Profitability plan for January 2027
The company's plans for the fiscal year ending January 2027 are as follows.
| Item | Company plan for the year ending January 2027 |
|---|---|
| Sales | 8.000 billion yen |
| Operating income | 40 million yen |
| Ordinary profit | 40 million yen |
| Net income attributable to owners of parent company | 10 million yen |
| EPS | 4.09 yen |
It is a plan to return to profitability.
However, investors still lack confidence.
In order to return from an operating loss of 503 million yen to an operating profit of 40 million yen, an improvement of over 500 million yen from the previous year would be required. This is not enough just for the number of customers to return a little.
What is needed is to improve the gross profit of existing stores, liquidate unprofitable stores, suppress SG&A expenses, promote seat fees and price increases, advance external sales contracts, and stabilize franchise income.
Starting in December 2025, the company will introduce a 180 yen seat fee for customers who visit after 3 p.m. Although this is a substantial measure to improve unit prices, it must be balanced against customer loss.
If the company can turn a profit, the stock price will be more likely to react.
On the other hand, if profitability is delayed, there will be heightened concerns about financial deterioration, dilution, and slowing growth.
Focus is on FC conversion and external sales of gyoza
Going forward, 7674 will be in trouble if it is just a company that just increases the number of directly managed stores.
A model in which companies shoulder all personnel costs, recruitment, training, repairs, and capital investment in-house is difficult in an inflationary environment.
Therefore, what the market wants to see is weight reduction.
Specifically, it is about becoming a franchise and selling gyoza outside.
Looking at the sales breakdown for the fiscal year ending January 2026, directly managed store sales were 6.488 billion yen, product wholesale sales were 512 million yen, and FC sales were 129 million yen. Company documents also show delays in an external sales contract for a gyoza factory and the withdrawal of two franchised stores.
In other words, the lightweight model is not yet fully functional.
However, this cannot be overlooked as a direction for rebuilding.
Should we move closer to a gyoza brand supplier rather than a directly managed izakaya chain?
Manufacturing, external sales, FC, licensing, frozen gyoza, event sales. If profits can be made outside of stores, the way things are viewed will change.
Illustration: Points to see in the reconstruction of 7674
Conditions for stock price reversal
For 7674's stock price to reverse, we need numbers rather than stories.
There are three things the market wants to see:
| Conditions | View |
|---|---|
| Improving same store profit margin | Will store profits return instead of sales |
| Maintaining customer numbers even after price increases | Will improving seat fees and unit prices cause customer loss? |
| Completion of liquidation of unprofitable stores | Will impairment losses and store closures come to an end |
In addition, if FC sales and product wholesale sales increase, the evaluation will change.
It is still weak to just slightly reverse the operating deficit of directly managed stores. For the market to see it as a growth stock again, it needs revenue sources other than stores.
KPIs that investors should look at
The indicators I would like to check for 2027 are as follows.
| KPI | Reasons to watch |
|---|---|
| Existing store sales | Is there still demand for the brand |
| Number of customers at existing stores | Are you losing customers due to price increases and seat fees? |
| Average price per customer | Is inflation being passed on to prices? |
| Store operating profit margin | Is the main business returning to profitability |
| Number of store closures/amount of impairment losses | Has the liquidation of unprofitable stores been completed |
| Number of FC stores | Are people transitioning to lightweight models |
| On product wholesale | Will external sales of gyoza become a second source of income |
| Cash balance | Can we withstand a prolonged deficit |
Particularly important are profits over sales and cash over profits.
Operating CF remained at 2 million yen in the fiscal year ending January 2026. Even if you have a plan to return to profitability, the market will not trust you if you do not have more cash.
Summary
The market evaluation of NATTY SWANKY (7674) has changed from a popular brand company to a company that is rebuilding profits.
Sales increased to 7.683 billion yen. However, the operating loss was 503 million yen, and the final deficit was 930 million yen. As for restaurant stocks, a collapse in profits is seen more strongly than sales growth.
Dandadan's brand power still remains. The market for gyoza is also strong. However, there is a difference between a strong gyoza market and a profitable gyoza izakaya.
The biggest theme for the fiscal year ending January 2027 is whether we can achieve profitability.
If the company sees a return to profitability, there is room for the stock price to rebound significantly. On the other hand, if deficits persist, there will be heightened concerns about financial deterioration, dilution, and slowing growth.
Will 7674 end up being a popular gyoza bar?
Or will it become a national gyoza brand that can be monetized?
The answer lies in the same store profit margin, the number of customers after the price increase, the number of store closures, conversion to franchise stores, and external sales of gyoza.
Source
- NATTY SWANKY Holdings “Summary of Financial Results for the Fiscal Year Ending January 2026”, disclosed on March 13, 2026
- NATTY SWANKY Holdings “Full year ending January 2026 financial results briefing material”, disclosed on March 13, 2026
- NATTY SWANKY Holdings “Matters regarding business plans and growth potential”, disclosed on April 22, 2026