| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥91.5B | ¥90.0B | +1.7% |
| Operating Income / Operating Profit | ¥2.7B | ¥4.2B | -35.3% |
| Ordinary Income | ¥2.8B | ¥4.3B | -35.0% |
| Net Income | ¥1.8B | ¥2.6B | -30.7% |
| ROE | 0.9% | 1.3% | - |
For the Q1 of the fiscal year ending April 2026, Revenue was ¥91.5B (YoY +¥1.5B +1.7%), Operating Income was ¥2.7B (YoY -¥1.5B -35.3%), Ordinary Income was ¥2.8B (YoY -¥1.5B -35.0%), and Quarterly Net Income attributable to owners of the parent was ¥1.8B (YoY -¥0.8B -30.7%). Revenue recorded a slight increase driven by steady performance in the core Western confectionery manufacturing and sales business, but on the profit side gross margin declined from 50.3% in the prior year to 48.6% (down 1.7pt) and operating margin contracted from 4.7% to 3.0% (down 1.7pt). The primary causes of the gross margin decline are inferred to be higher raw material costs (dairy products, cocoa, etc.) and a deterioration in product mix. SG&A ratio improved slightly to 45.6% (down 0.1pt YoY) but could not offset the gross margin decline, resulting in a significant drop in profits. ROE remained low at 0.9% (prior year 1.3%), and EPS of 9.12円 represented a YoY decrease of -30.2%.
[Revenue] Revenue of ¥91.5B represented a YoY increase of +1.7%. By segment, the Western confectionery manufacturing and sales business recorded ¥86.5B (composition ratio 94.5%, YoY +1.6%) and remained the mainstay of stable performance, while the Café & Restaurant business posted ¥5.0B (composition ratio 5.5%, YoY +2.7%) marking a slight increase. Although topline growth was secured, the growth rate fell well below the industry median of 6.5%.
[Profitability] Operating Income of ¥2.7B was down substantially YoY by -35.3%. The main factor was deterioration in gross profit margin: Gross Profit was ¥44.5B (Gross Margin 48.6%), down ¥0.8B from ¥45.3B (50.3%) in the prior year, a 1.7pt margin decline. This suggests impacts from rising raw material prices (dairy products, cocoa, etc.) and worsening product mix. SG&A was ¥41.8B (SG&A ratio 45.6%), up ¥1.6B YoY, though the SG&A ratio improved by 0.1pt. As a result, operating margin contracted from 4.7% to 3.0% (down 1.7pt). Non-operating items were minor: non-operating income ¥0.2B and non-operating expenses ¥0.1B, leaving Ordinary Income at ¥2.8B (YoY -35.0%). Extraordinary items were limited to gain on sale of investment securities ¥0.01B, so pre-tax income was ¥2.8B and the effective tax rate remained elevated at 35.1%, resulting in Net Income of ¥1.8B (YoY -30.7%). In conclusion, the company posted higher revenue but lower profits, with material declines in profitability.
The Western Confectionery Manufacturing & Sales segment recorded Revenue ¥86.5B (YoY +1.6%) and Operating Income ¥6.2B (YoY -18.3%, margin 7.2%), showing revenue growth but a margin decline of 1.7pt from 8.9% in the prior year. The Café & Restaurant segment secured Revenue ¥5.0B (YoY +2.7%) but swung to an operating loss of ¥0.1B (margin -1.5%), a marked deterioration from Operating Income ¥0.01B (margin 1.6%) a year earlier. Total segment profit of ¥6.1B was allocated corporate expenses of ¥3.4B (prior year ¥3.5B), diluting consolidated Operating Income to ¥2.7B. Declines in profitability in the core business and the restaurant segment turning into a loss structurally pressured overall performance.
[Profitability] Operating margin of 3.0% is 2.2pt below the industry median of 5.2%, and Net Margin of 2.0% is 1.7pt below the industry median of 3.7%. ROE at 0.9% declined from 1.3% year-on-year; the DuPont decomposition shows Net Margin 2.0% × Total Asset Turnover 0.321x × Financial Leverage 1.43x, indicating the decline was mainly driven by Net Margin contraction. Gross Margin at 48.6% was down 1.7pt YoY, suggesting impacts from higher raw material costs and adverse product mix. [Cash Quality] Operating working capital indicators are elongated with DSO 86 days, DIO 209 days, and CCC 194 days, indicating receivables and inventory stagnation have reduced cash generation efficiency. [Investment Efficiency] EBIT margin at 3.0% is low, and with Total Assets of ¥285.2B, ROA is only 1.0% (annualized). [Financial Soundness] Equity Ratio is 69.7% (prior year 70.6%), Current Ratio 165.3%, Quick Ratio 151.8%, showing good liquidity. Debt/Equity (gearing) is 0.43x and Debt/Capital is 9.2%, indicating low leverage. However, Short-term Debt Ratio is 83.5%, showing a short-term borrowing bias and potential refinancing risk; still, Cash/Short-term Debt ratio is 4.08x, indicating ample liquidity.
Direct data for Operating Cash Flow and Investing Cash Flow are not disclosed, but funding trends are analyzed from the B/S movement. Cash and deposits increased significantly to ¥68.7B, a YoY increase of ¥47.6B (+225.9%). This was driven by a large decrease in accounts receivable to ¥21.5B (YoY -¥56.3B, -72.4%) and a decrease in inventories to ¥9.9B (YoY -¥14.2B, -59.1%), suggesting working capital was converted to cash. Accounts payable increased to ¥13.1B (YoY +¥2.9B, +28.5%), which may reflect extended payment terms or increased procurement. While DSO 86 days, DIO 209 days, and CCC 194 days remain long-term issues for working capital, at the quarter end receivables and inventories were compressed, significantly boosting cash on hand. Tangible fixed assets increased to ¥122.0B (YoY +¥1.4B), indicating ongoing capital expenditures. Borrowings totaled ¥20.2B (short-term ¥16.9B, long-term ¥3.3B), down ¥2.7B YoY, suggesting debt repayments and a reduction in financial liabilities. Given ample liquidity and low leverage, continued dividend payments and investments are feasible, but sustained improvement in working capital turnover is key for persistent cash generation.
Earnings quality is generally sound on an operating basis. Non-operating income was ¥0.2B (0.2% of Revenue) and non-operating expenses ¥0.1B, so non-operating items were minor. Dividend income received was ¥0.02B and interest expense was ¥0.08B, indicating limited impact from financial income/losses. Extraordinary income included only ¥0.01B from sale of investment securities, and extraordinary losses were ¥0.0B from disposal of fixed assets, so one-off items had virtually no impact. The gap between Ordinary Income ¥2.8B and Net Income ¥1.8B is mainly due to a high effective tax rate of 35.1%, reflecting recurring tax burden. The difference between Comprehensive Income ¥2.0B and Net Income ¥1.8B was small (foreign currency translation adjustments ¥0.1B, actuarial adjustments related to retirement benefits ¥0.1B), implying no material change in earnings quality on a comprehensive basis. However, on an accrual basis DSO 86 days and DIO 209 days indicate elongated receivables and inventory turnover, making working capital management essential to convert profits into cash. At the quarter end receivables and inventory decreased substantially and were converted to cash, but whether turnover improvement will persist through the full year remains a key point.
The Full Year guidance is unchanged: Revenue ¥368.2B (YoY +1.5%), Operating Income ¥13.1B (YoY +3.6%), Ordinary Income ¥13.5B (YoY +5.0%), Net Income ¥7.7B, EPS 38.37円, Dividend ¥6.00円. Q1 progress ratios were Revenue 24.9% (roughly in line with standard 25%), Operating Income 20.8% (4.2pt below standard 25%), Ordinary Income 20.7% (4.3pt below), and Net Income 23.8% (1.2pt below). The lag in Operating Income is mainly due to the decline in gross margin and the restaurant segment turning into a loss; achievement of the full-year plan assumes recovery in gross margin through price revisions, product-mix improvements, and a slowdown in raw material cost increases from Q2 onward. The dividend forecast of ¥6.00 implies a Payout Ratio of 15.6% versus forecast EPS of 38.37円, a conservative level; given cash on hand of ¥68.7B and low leverage, dividend continuity is assessed as high.
The annual dividend forecast is ¥6.00 per share, unchanged from the prior year. Company forecast EPS is 38.37円, implying a Payout Ratio of approximately 15.6%, a conservative level. As of the end of Q1, Cash and Deposits were ¥68.7B, Equity Ratio 69.7%, and Debt/Capital 9.2%, indicating a solid financial base and high sustainability of the current dividend level. Treasury stock increased YoY by ¥+9.5B and is recorded as -¥7.2B in net assets, suggesting past buybacks or disposals, but there is no disclosure of additional acquisitions or cancellations in this quarter. There is no disclosure of Total Return Ratio, as returns have been via dividends only. Future dividend increases would depend on recovery in gross margin and improved working capital efficiency boosting cash generation, but conservative payout and financial headroom leave scope for phased increases.
Gross margin pressure risk: Gross Margin at 48.6% declined 1.7pt YoY, and Operating Margin at 3.0% is 2.2pt below the industry median of 5.2%. Rising raw material prices (dairy products, cocoa, etc.) and worsening product mix are primary drivers; prolonged delays in price revisions and mix optimization could cause prolonged margin weakness.
Working capital elongation risk: DSO 86 days, DIO 209 days, and CCC 194 days indicate a prolonged working capital cycle, and receivable/inventory stagnation is compressing cash generation. Although receivables and inventories were compressed at the quarter end, failure to sustain turnover improvements over the full year could constrain investment and dividend capacity.
Short-term debt concentration risk: Short-term Debt Ratio at 83.5% shows a marked short-term bias in borrowings, and there is structural refinancing/rollover risk for short-term borrowings of ¥16.9B. While Cash/Short-term Debt ratio of 4.08x indicates ample liquidity, the company remains vulnerable to rising funding costs in an interest-rate upswing.
Profitability & Return
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.0% | 5.2% (1.2%–6.4%) | -2.2pt |
| Net Margin | 2.0% | 3.7% (0.3%–4.9%) | -1.7pt |
Profitability ranks in the lower tier within the industry; restoring gross margin and improving cost structure are priorities.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 1.7% | 6.5% (3.8%–10.4%) | -4.8pt |
Growth significantly lags the industry median, necessitating stronger price/mix strategies and new product introductions to accelerate growth.
※ Source: Company aggregation
Progress in gross margin recovery is key to profit recovery. Operating Margin at 3.0% is well below the industry median of 5.2%, primarily due to higher raw material costs and adverse product mix. The extent to which price revisions and mix shifts toward higher value-added products restore gross margin will be the litmus test for achieving full-year guidance and sustainable profit growth.
Improvement in working capital efficiency is a prerequisite for sustained cash generation. The extended working capital cycle (DSO 86 days, DIO 209 days, CCC 194 days) reduces cash generation efficiency. Although receivables and inventories were compressed at the quarter end, broader points include whether inventory optimization and stronger receivables collection can be sustained through the full year. Improvements in working capital management will directly expand capacity for dividends and capital expenditures.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statement data. Investment decisions are your responsibility; please consult a professional advisor as needed.
These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.