Japanese green tea giant Ito En surges 8%, defying a broad market sell-off

Japanese green tea giant Ito En surges 8%, defying a broad market sell-off Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Key Points The Japanese beverage maker reported stronger fiscal first-quarter profit, helped by improved profitability in its core tea and beverage business. Citi called the results positive and highlighted the vending machine business turning profitable after the company integrated its related operations in May. Operating profit jumped 22% year on year to 10.2 billion yen, while revenue rose 3.3% In this article 2593.T-JP Follow your favorite stocks CREATE FREE ACCOUNT A close up view of a bottle of Oi Ocha unsweetened green tea with an image of Japanese professional baseball pitcher and designated hitter for the Los Angeles Dodgers, Shohei Ohtani. Ohtani is a Global Ambassador of ITO EN's green tea brand, 'Oi Ocha'. (Photo by Erica Denhoff/Icon Sportswire via Getty Images) Icon Sportswire | Icon Sportswire | Getty Images Shares of Japanese beverage maker Ito En surged more than 8% Wednesday, following its fiscal first-quarter results , bucking a broader drop in the country's stocks. The maker of Oi Ocha green tea on Tuesday reported operating profit of 10.2 billion yen ($63.7 million) for the three months from May through July, up 22% from a year earlier. Revenue rose 3.3% to 135.18 billion yen over the same period. Operating profit came in well above Citi's forecast of 7.7 billion yen. The bank had expected profit to decline on the back of higher raw material and tea leaf costs, as well as expenses related to the company's vending machine business. More than half of the 2.5 billion yen profit beat was powered by the company's vending machine business, which posted a 4% operating profit margin compared to the bank's expectations for a loss. The company said it integrated its vending machine-related businesses in May to improve profitability and business efficiency. Citi called the first-quarter results "positive" for the shares, adding that the May-to-July period is the peak demand season for soft drinks. The bank said that the vending machine business' profitability was "impressive," given it had been loss-making until last year. The company reported that tea leaves and beverages segment's operating profit rose 23.5% to 8.99 billion yen, while sales rose 2.7%. It attributed the improved profitability to lower promotional expenses and reduced depreciation, which helped offset rising costs. Ito En, whose Oi Ocha brand is marketed globally with baseball star Shohei Ohtani, said it aims to expand its overseas business to more than 60 countries and regions by the fiscal year ending April 2029, from 52 currently. It said sales volumes of beverages and tea bags were increasing in markets where it already operates. Ito En held the leading share of Japan's green tea beverage market in 2025 and accounts for about 25% of crude tea transaction volumes in the country, according to the company. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.