Yoshinoya D&C Co. said Friday its sales and profits fell in the year that ended Feb. 29 and it anticipates even steeper declines for the current business year due to the ongoing ban on U.S. beef imports.
Yoshinoya, the nation’s No. 1 chain serving beef-on-rice dishes, stopped serving its mainstay dish of “gyudon” beef on rice on Feb. 11 after its stocks of beef ran out.
It said its group net profit fell 33.8 percent from the previous year to 5.69 billion yen amid weak sales.
Pretax profit was 12.43 billion yen, down 17.3 percent, on a 3.4 percent decline in group sales to 141.05 billion yen.
The company said it opened 123 new gyudon outlets in the just-ended year, including two in Malaysia and three in the United States.
But sales at existing outlets were generally sluggish due to prolonged weakness in personal consumption in Japan, and worsened after the company removed gyudon from the menu, it said.
Japan imposed the import ban late last year after the discovery of a case of mad cow disease in the U.S.
Yoshinoya and the nation’s other major gyudon chains, which relied almost entirely on U.S. beef for their dishes, were forced to remove the dish from their menus in February and replace it with alternative products featuring chicken and pork.
Yoshinoya President Shuji Abe told reporters the same day that the company will cut the salaries of its executive directors by 10 percent to 20 percent, effective from April, to take the blame for the poor earnings results.
“Top managers have to be responsible for the outcome,” Abe reckoned.
Abe said that he and Mitsuo Murata, chairman of Yoshinoya, would take a pay cut of 20 percent while other board members would have their pay cut by 10 percent.
For the current business year to Feb. 28, Yoshinoya expects its group net profit to fall 44.5 percent from a year earlier to 3.16 billion yen and group sales to decline 8.5 percent to 129 billion yen on the assumption that the government will not lift the beef import ban this year.