Fujio Food’s expansion into the fitness sector is under financial pressure as its subsidiary, FM Commercial Planning, faces significant operational challenges, despite a recent uptick in the company’s stock price.
The Osaka-based FM Commercial Planning, which is part of Fujio Food Group, has been venturing beyond its traditional food business into the fitness industry. However, the costs associated with this move are proving difficult to manage. The company’s administrative expenses have reached 90.89 million yen, surpassing its gross profit of 65 million yen. This indicates a clear need for better cost control. Additionally, non-operating expenses have climbed to 14.2 million yen, while the subsidiary’s non-operating income remains low at just 1.25 million yen, further straining its financial stability.
Although the company shares leadership with Fujio Food, aligning their strategic goals, FM Commercial Planning’s financial struggles could affect the group’s overall health. Still, Fujio Food’s stock rose by 0.51%, reaching 1,177 yen, despite these challenges.
For investors, this situation highlights the risks of pursuing new ventures without proper financial oversight. While diversification can offer new revenue streams, FM Commercial Planning’s financial issues may affect the group’s long-term stock performance and overall stability.
Fujio Food’s attempt at cross-industry expansion into fitness underscores the difficulties companies face when branching out from their core business. This move suggests that companies need to carefully align new ventures with their financial health and governance structures to avoid putting overall performance at risk.
