COMO CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥3.63B
• Operating Income: ¥-13M
• Net Income: ¥61M
• EPS: ¥-5.34

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Komos FY2026 Q2 results show modest top-line contraction with ongoing pressure at the operating line, but signs of sequential margin repair. Revenue fell 1.8% YoY to ¥3,629m, reflecting softer volumes and/or mix amid a challenging consumer backdrop. Gross profit was ¥1,010.6m, implying a 27.8% gross margin that remains respectable for packaged bakery but still leaves limited cushion once distribution and SG&A are considered. Operating income was a small loss of ¥13m (an improvement YoY given +141.9% change), placing the business near breakeven on an EBIT basis. Ordinary income and net income were losses of ¥10m and ¥18m, respectively, with EPS at -¥5.34. EBITDA of ¥139.7m (3.9% margin) indicates positive underlying cash earnings before depreciation, though not yet sufficient to consistently cover fixed costs and interest. The DuPont bridge yields ROE of -0.9%, driven by a thin negative net margin (-0.50%), moderate asset turnover (0.773x), and leverage of 2.34x. Liquidity is tight: the current ratio is 78.5% and working capital is negative ¥418m, indicating reliance on short-term funding and efficient cash conversion. Operating cash flow was -¥48.7m, and financing cash flow was -¥218.6m, suggesting net outflows tied to debt service or other financing uses; investing cash flow is unreported in this dataset. Debt-to-equity stands at 1.34x, a manageable but non-trivial leverage level for a food manufacturer with modest margins. Despite the net loss, reported income tax expense of ¥36.3m suggests non-deductible items and timing differences; the provided effective tax rate metric is listed as 0.0%, which may reflect calculation constraints given losses. Dividend per share is zero, consistent with preserving liquidity given negative OCF and near-breakeven EBIT. Cash and equivalents are unreported (listed as 0 in the dataset), limiting full liquidity assessment. Several key disclosures (equity ratio, cash balance, investing cash flows, shares outstanding) are unreported, so conclusions rely on the available non-zero data points. Overall, fundamentals indicate a company navigating cost pressures with gradual operating improvement, but still facing liquidity constraints and execution risk on margin restoration in the second half.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: -0.005
• asset_turnover: 0.773
• financial_leverage: 2.34
• calculated_ROE: -0.009
• commentary: ROE of -0.9% is primarily a function of a small negative net margin while asset turnover is reasonable for the category; leverage amplifies the margin effect slightly. margin_quality: Gross margin of 27.8% is decent for packaged bakery, indicating some pricing power and/or product mix resilience. However, conversion from gross profit to operating profit is weak, with an operating margin of -0.4% (¥-13m EBIT on ¥3,629m sales). EBITDA margin of 3.9% shows positive cash earnings before depreciation, but SG&A and distribution costs absorb most of the gross profit, leaving limited room for shocks. Interest expense (¥5.5m) is small in absolute terms, but EBIT coverage is negative (-2.4x) given an EBIT loss, underlining the need to restore operating profitability. operating_leverage: Given the small EBIT loss near breakeven, incremental volume or pricing could swing earnings meaningfully; conversely, minor revenue declines can push EBIT negative. The -1.8% revenue change coinciding with a small improvement in operating loss suggests cost actions and/or pricing supported sequential leverage, but the model remains sensitive until a stable low-single-digit operating margin is reached.

Growth Assessment

revenue_sustainability: Revenue declined 1.8% YoY to ¥3.63bn, indicating modest demand softness or adverse mix. Given Komos focus on long shelf-life bread and convenience/retail channels, category demand is relatively defensive, but competitive pricing and private label can weigh on growth. profit_quality: EBITDA is positive (¥139.7m) but EBIT is slightly negative, highlighting high fixed-cost absorption and distribution/logistics cost pressure. Net loss of ¥18m includes tax expense, suggesting timing/non-deductible impacts; core profitability improvements must come from cost control and pass-through pricing. outlook: Key near-term drivers are cost pass-through, product mix upgrades, and utilization improvements in H2. With EBIT near breakeven, even small margin gains can turn full-year ordinary income positive, but risk remains from raw material and energy costs.

Financial Health

liquidity: Current assets ¥1,527.7m vs current liabilities ¥1,945.4m yields a current ratio of 0.79x and quick ratio of 0.74x; working capital is negative ¥417.8m. Cash and equivalents are unreported in this dataset, constraining visibility on immediate liquidity. Tight short-term liquidity underscores importance of consistent cash conversion. solvency: Total liabilities ¥2,686.8m vs equity ¥2,004.0m gives debt-to-equity of 1.34x. Financial leverage (assets/equity) is 2.34x. While not excessive for the sector, persistent losses could pressure covenants or refinancing flexibility if not reversed. capital_structure: Assets of ¥4,695m are funded 57% by liabilities and 43% by equity (implied from leverage; reported equity ratio is unreported). Interest burden is modest (¥5.5m), but negative EBIT results in poor coverage.

Cash Flow Quality

earnings_quality: OCF/Net income is 2.70, but both OCF (-¥48.7m) and NI (-¥18.0m) are negative; therefore, this ratio is not indicative of strong quality and should not be interpreted as a positive signal. The divergence suggests working capital outflows and timing effects weigh on cash generation. FCF_analysis: Free cash flow is listed as 0 in the dataset (unreported). With OCF negative and investing cash flows unreported, underlying FCF is likely negative in practice. EBITDA is positive, but not enough to offset working capital and financing needs. working_capital: Negative working capital (¥-417.8m) indicates reliance on supplier credit and/or rapid inventory turnover. Reported inventories are ¥82.3m (small relative to sales), but inventory and receivable days cannot be derived from the provided data; cash conversion cycle visibility is limited.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is 0 and payout ratio is 0%, consistent with a net loss and the need to conserve cash. With ROE negative and EBIT near breakeven, resuming dividends would require consistent positive earnings. FCF_coverage: FCF coverage is listed as 0.00x in the dataset (unreported); given negative OCF and unknown capex, sustainable dividend coverage is currently not evident. policy_outlook: Given liquidity tightness and the focus on restoring profitability, maintaining a conservative dividend stance appears likely until OCF turns positive and leverage/coverage metrics improve.

Risk Assessment

Business Risks:

• Raw material and packaging cost volatility (wheat, sugar, oils, plastics) and energy/fuel costs impacting COGS and distribution
• Competitive pricing pressure from larger bakery manufacturers and private label
• Channel concentration risk in convenience stores and mass retail
• Demand softness amid consumer real income pressure and downtrading
• Execution risk on price pass-through and product mix upgrades
• Operational leverage risk due to high fixed costs and capacity utilization variability
• Supply chain/logistics disruptions affecting delivery performance and costs

Financial Risks:

• Tight liquidity with current ratio at 0.79x and negative working capital
• Negative operating cash flow in the period and dependence on short-term funding
• Weak interest coverage due to negative EBIT
• Refinancing and covenant headroom risk if losses persist
• Limited disclosure on cash balance and investing cash flows, constraining visibility

Key Concerns:

• Restoring and sustaining positive operating margin
• Turning operating cash flow positive and improving cash conversion
• Managing input cost inflation and logistics expenses without sacrificing volume
• Maintaining supplier and lender confidence amid negative working capital

Investment Implications

Key Takeaways:

• Revenue declined 1.8% YoY to ¥3.63bn; category defensiveness offset by pricing and competition headwinds
• Gross margin at 27.8% is stable, but operating margin remains slightly negative at -0.4%
• EBITDA positive at ¥139.7m (3.9% margin), indicating underlying earnings capacity before depreciation
• ROE at -0.9% driven by negative net margin; asset turnover of 0.77x is reasonable
• Liquidity tight with current ratio 0.79x and working capital at -¥418m
• OCF negative (-¥48.7m); FCF and cash balance unreported, limiting visibility
• Leverage moderate (D/E 1.34x), but coverage weak due to negative EBIT
• Dividend suspended (DPS 0) to preserve cash

Metrics to Watch:

• Gross and operating margin progression, especially price/mix versus input costs
• Operating cash flow and working capital movements (receivables, payables, inventory days)
• EBIT and EBITDA coverage of interest and fixed costs
• Top-line trends by channel and product mix (premium vs. value lines)
• Investing cash flows and capex intensity once disclosed
• Leverage metrics (net debt/EBITDA when cash is disclosed) and covenant headroom

Relative Positioning: Within Japanese packaged bakery and confectionery peers, Komo benefits from a niche in longer shelf-life products that can support distribution efficiency, but near-term profitability and liquidity metrics lag best-in-class operators; successful cost pass-through and utilization improvements are needed to close the gap.

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
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis