Day-Lee Foods (2282): Visit Note - Production Issues Resolved; Focus Shifts to Broadening Sales Channels and Lifting Profitability
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JPMorgan visited Day-Lee Foods' (DLF) US operations on October 5, 2026. After the 2025 acquisition of LJD Holdings, the Tamarack plant suffered from low productivity, but the main issues have now been resolved and output is recovering: monthly volumes have risen from about 250 tons to 300 tons, breakeven at 450 tons is expected within FY2026, and the longer-term goal is full two-shift capacity. DLF recorded FY2025 sales of ¥106.3 billion, with the processed business only a limited share, and a ¥400 million loss; the company targets ¥1.5 billion of operating profit in FY2026. Strategic focus now shifts to broadening sales channels to support capacity expansion and reduce dependence on a single customer—Costco accounts for roughly 70% of core 'citrus chicken' sales. Although the company aims to raise North American processed-food operating margins to 10%, they currently stand at just 2-3%, and JPMorgan sees the target taking time to achieve. The stock is rated Neutral with a ¥2,170 target price.