A close-up of a bottle of Oi Ocha’s unsweetened green tea depicting Japanese professional baseball pitcher and designated hitter for the Los Angeles Dodgers, Shohei Otani. Otani is the global ambassador for Ito En’s green tea brand “Oi Ocha”. (Photo by Erika Denhoff/Icon Sportswire via Getty Images)
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Japanese beverage manufacturer stocks Itoen Shares soared more than 8% on Wednesday after first-quarter results, bucking a steep decline in the country’s stock market.
Oi Ocha green tea maker on Tuesday reported operating profit for the three months from May to July of 10.2 billion yen ($63.7 million), up 22% from a year earlier. Sales increased 3.3% year on year to 135.18 billion yen.
Operating income significantly exceeded Citi’s forecast of 7.7 billion yen. The bank had expected a decline in profit due to rising prices for raw materials and tea leaves, as well as costs related to its vending machine business.
More than half of the 2.5 billion yen profit came from the company’s vending machine business, and the operating profit margin was 4%, compared to the bank’s deficit forecast. The company announced in May that it had integrated its vending machine-related businesses in an effort to improve profitability and business efficiency.
Citi said the first quarter results were “positive” for the company, adding that May-July is the peak demand period for soft drinks. The bank said the profitability of its vending machine business was “tremendous” considering it was in the red until last year.
According to the company, operating profit in the tea leaves and beverages division increased by 23.5% to 8.99 billion yen, and sales increased by 2.7%. The increase in profitability was due to reductions in promotional expenses and depreciation expenses, which offset the increase in costs.
Ito En, which is developing the Oi Ocha brand worldwide with baseball player Shohei Otani, announced that it aims to expand its overseas business from the current 52 countries and regions to more than 60 countries by the fiscal year ending April 2029. The company said it is seeing increased sales of beverages and tea bags in markets where it already operates.
According to the company, ITO EN will have the top share of Japan’s green tea beverage market in 2025, accounting for approximately 25% of Japan’s crude tea trading volume.
