IMURAYA GROUP CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥26.24B
• Operating Income: ¥1.97B
• Net Income: ¥1.05B
• EPS: ¥113.49

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Imuraya Group (TSE: 22090) delivered solid FY2026 Q2 results with top-line growth and notable margin expansion. Revenue rose 7.6% YoY to ¥26.237bn, underpinned by favorable mix and likely pricing actions across core confectionery and frozen dessert categories. Gross profit reached ¥8.691bn, translating to a gross margin of 33.1%, which supports the thesis of improved product mix and disciplined input cost management. Operating income increased 37.6% YoY to ¥1.972bn, outpacing sales growth and indicating positive operating leverage through SG&A discipline and better capacity utilization. Ordinary income of ¥2.041bn exceeded operating income, suggesting a modest net positive contribution from non-operating items. Net income rose 37.3% YoY to ¥1.452bn, and EPS printed at ¥113.49 for the period. The DuPont-derived ROE is 6.22%, built on a 5.53% net margin, 0.649x asset turnover, and 1.73x financial leverage; this reflects improving profitability with moderate capital intensity and prudent leverage. Liquidity is adequate but tight, with a current ratio of 108.1% and quick ratio of 78.6%, highlighting the importance of working capital management, especially around seasonal inventory. Cash generation was robust: operating cash flow of ¥3.224bn implies a healthy OCF/Net Income ratio of 2.22, evidencing strong earnings quality and cash conversion. Financing cash outflows of ¥2.556bn suggest debt repayments or other financing uses; with interest expense at only ¥28m and interest coverage at 70x, solvency risk appears low. The reported equity ratio field is unreported; based on provided equity of ¥23.362bn and assets of ¥40.457bn, the implied equity ratio is approximately 57.7%, indicating a conservative balance sheet. Inventory of ¥3.544bn comprises roughly 27% of current assets, consistent with a seasonal consumer foods business; monitoring turnover is prudent amid demand variability. While Free Cash Flow cannot be determined due to unreported investing cash flows, the strong OCF suggests capacity to fund routine capex and maintain balance sheet health. Dividend fields are unreported for the period (DPS and payout showing as zero indicate non-disclosure mid-year, not actual zeros), so dividend sustainability must be assessed qualitatively from earnings and cash flow. Overall, Imuraya is exhibiting healthy growth momentum, improving profitability, and strong cash generation, with a solid equity cushion and manageable leverage. Key watchpoints include raw material and energy costs, FX on imports, and inventory discipline heading into seasonally sensitive periods. Data limitations on cash, investing flows, and share metrics warrant caution in interpreting per-share and FCF coverage ratios.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.53%
• asset_turnover: 0.649
• financial_leverage: 1.73
• calculated_ROE: 6.22%
• commentary: ROE improvement is driven primarily by stronger margins and steady asset turnover; leverage remains moderate, providing prudent risk control. margin_quality:
• gross_margin: 33.1%
• operating_margin: 7.5%
• ordinary_margin: 7.8%
• net_margin: 5.53%
• insights: Gross margin supports value-add positioning and likely price/mix gains. Operating margin expansion (OP +37.6% vs sales +7.6%) indicates SG&A efficiency and operating leverage. Non-operating items are modestly accretive (ordinary > operating). operating_leverage: High in the period: operating income growth far outpaced revenue, implying fixed-cost absorption benefits and disciplined overheads. Sustainability depends on volume retention post-peak seasonal demand and continued cost normalization.

Growth Assessment

revenue_sustainability: Revenue grew 7.6% YoY to ¥26.237bn, likely supported by pricing and resilient demand in core categories. Continuity will hinge on consumer elasticity, product innovation, and channel execution, especially for seasonal items. profit_quality: Net income growth of 37.3% YoY reflects genuine margin expansion rather than one-off gains, given stable non-operating line and very strong OCF backing earnings (OCF/NI 2.22). outlook: With gross margin at 33.1% and OP margin at ~7.5%, the company is positioned to benefit from a normalized input-cost environment. Key sensitivities include raw material prices (red beans, sugar, dairy), energy, and FX. Maintaining price realization and mix should support mid-single-digit sales growth with modest incremental margin gains if volumes hold.

Financial Health

liquidity:

• current_ratio: 108.1%
• quick_ratio: 78.6%
• working_capital: ¥973.3m
• commentary: Liquidity is adequate but not overly comfortable; reliance on inventory is meaningful. Active receivables and inventory management are critical through seasonal peaks. solvency:
• debt_to_equity: 0.62x
• interest_coverage: 70.0x
• equity_ratio_implied: 57.7%
• commentary: Leverage is moderate with very strong coverage, and an implied equity ratio near 58% suggests a solid capital base. Refinancing risk appears low. capital_structure: Balanced; moderate debt supports operations while equity provides a sizable cushion. Financing cash outflows indicate deleveraging or other financing uses without stress on coverage metrics.

Cash Flow Quality

earnings_quality: High. OCF/Net Income of 2.22 indicates strong accrual discipline and cash conversion, with limited reliance on non-cash earnings. FCF_analysis: Free Cash Flow cannot be determined because investing cash flows are unreported for the period. However, OCF of ¥3.224bn likely covers maintenance capex and modest growth capex, implying underlying FCF health. working_capital: Inventories of ¥3.544bn represent ~27% of current assets, consistent with seasonal build. Monitoring inventory days and receivable collections is important to prevent cash lock-up.

Dividend Sustainability

payout_ratio_assessment: Payout metrics are unreported this quarter (DPS and payout showing zero are placeholders). On fundamentals, earnings growth and strong OCF support capacity for dividends. FCF_coverage: Not assessable this period due to unreported investing cash flows; historical maintenance capex relative to depreciation would help triangulate coverage. policy_outlook: Given improving profitability, low interest burden, and conservative balance sheet, the company appears positioned to sustain or gradually enhance shareholder returns subject to capex needs and seasonality.

Risk Assessment

Business Risks:

• Raw material cost volatility (azuki/red beans, sugar, dairy, wheat).
• Energy and logistics cost inflation impacting COGS and distribution.
• Weather-driven demand swings for frozen desserts and seasonal products.
• Consumer downtrading and price elasticity affecting mix and volume.
• Execution risk in product innovation and channel strategy.
• Brand and quality risk in a competitive domestic confectionery market.

Financial Risks:

• Tight short-term liquidity metrics if working capital expands seasonally.
• FX exposure on imported inputs impacting gross margin.
• Potential capex upcycle compressing near-term FCF (investing CF not disclosed).
• Interest rate risk limited but present if debt structure re-prices.

Key Concerns:

• Sustainability of operating leverage after the seasonal peak.
• Inventory management to avoid build-ups that trap cash.
• Input cost re-acceleration that could pressure gross margins.

Investment Implications

Key Takeaways:

• Strong H1 margin expansion with OP +37.6% YoY on +7.6% sales highlights operating leverage.
• Cash conversion is robust (OCF/NI 2.22), supporting balance sheet strength.
• Liquidity is adequate but must be managed carefully through seasonal swings (QR 78.6%).
• Leverage is moderate with excellent coverage (70x), and implied equity ratio ~58%.
• Non-operating items modestly positive (ordinary > operating), quality of earnings intact.
• Data gaps (investing CF, cash balance, share data) limit precision on FCF and per-share analysis.

Metrics to Watch:

• Gross margin and SG&A ratio for evidence of sustained pricing/mix benefits.
• Inventory days and receivables turnover to safeguard liquidity.
• Capex versus depreciation to gauge FCF and growth investment intensity.
• OCF/Net Income and working capital changes as cash quality indicators.
• Debt-to-equity and interest coverage for solvency resilience.
• FX and key commodity cost trends (beans, sugar, dairy, energy).

Relative Positioning: Compared with domestic mid-cap food peers, Imuraya shows competitive margins with improving operating leverage, conservative solvency, and strong cash conversion; liquidity is somewhat tighter than top-tier peers, warranting close working capital oversight.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
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