KOIKE-YA Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥29.96B
• Operating Income: ¥1.45B
• Net Income: ¥1.24B
• EPS: ¥67.88

Income Statement

Balance Sheet

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

KoiKeya (22260) reported FY2026 Q2 consolidated results under JGAAP with topline resilience but significant operating margin compression. Revenue grew 3.7% YoY to ¥29.96bn, while operating income fell 30.2% YoY to ¥1.45bn, indicating negative operating leverage. Gross profit was ¥9.28bn, implying a gross margin of 31.0%, but the operating margin reduced to approximately 4.8%, reflecting higher SG&A and/or increased input and logistics costs. Ordinary income of ¥1.43bn was close to operating income, showing minimal non-operating drag and very low interest expense (¥2mn). Net income was ¥724mn (down 34.6% YoY), with an implied effective tax rate around 36–37% based on income tax expense of ¥520mn and pre-tax income approximated by ordinary income. DuPont metrics point to modest profitability: net margin 2.42%, asset turnover 0.693x, and financial leverage 2.22x, resulting in ROE of 3.72% for the period. Liquidity remains solid with a current ratio of 150.8% and a quick ratio of 135.1%; working capital stands at ¥6.25bn. The balance sheet indicates total assets of ¥43.25bn and total equity of ¥19.49bn, implying an equity ratio of roughly 45% (the provided 0.0% equity ratio appears unreported rather than zero). Leverage looks moderate with a debt-to-equity ratio of about 1.01x when measured as total liabilities to equity. Interest coverage is very strong at 724x given minimal interest burden, suggesting low financial risk from debt service. Cash flow statement items were unreported in this dataset (showing zeros), so operating cash flow and free cash flow quality cannot be assessed from the provided figures. Dividend data were also unreported (DPS shown as 0.00), so payout assessment requires caution. Overall, the company demonstrates stable demand but faces cost pressure and/or higher SG&A, compressing operating earnings despite sales growth. The combination of solid liquidity and moderate leverage provides balance-sheet support, but lower ROE and margin compression are key areas to watch. Given the likely H1 seasonality embedded in Q2 cumulative numbers, full-year margin recovery will depend on pricing execution, mix improvement, and cost normalization.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 2.42%
• asset_turnover: 0.693x
• financial_leverage: 2.22x
• calculated_ROE: 3.72%
• interpretation: ROE is driven by moderate asset turnover and modest net margins; leverage contributes but is not excessive. margin_quality:
• gross_margin: 31.0%
• operating_margin: 4.83%
• net_margin: 2.42%
• commentary: Gross margin is healthy for a snack foods profile, but operating margin compression indicates elevated SG&A or sustained input/logistics costs not fully offset by price/mix. operating_leverage: Negative in the period: revenue grew 3.7% YoY while operating income declined 30.2% YoY, implying cost base increased faster than sales.

Growth Assessment

revenue_sustainability: Topline grew 3.7% YoY to ¥29.96bn, suggesting steady demand and/or pricing actions; sustainability will depend on consumer elasticity and competitive responses. profit_quality: Ordinary income closely tracks operating income, indicating limited reliance on non-operating gains; however, lower operating margin undermines earnings quality. outlook: Recovery hinges on cost normalization (raw materials, energy, logistics), disciplined SG&A, and effective pricing/mix. If cost pressures persist, margin recovery may lag even with stable sales growth.

Financial Health

liquidity:

• current_ratio: 150.8%
• quick_ratio: 135.1%
• working_capital: ¥6.25bn
• assessment: Short-term liquidity is solid, supported by ample current assets relative to current liabilities. solvency:
• total_assets: ¥43.25bn
• total_liabilities: ¥19.65bn
• total_equity: ¥19.49bn
• equity_ratio_implied: ≈45% (equity/total assets, based on provided balances)
• debt_to_equity_ratio: 1.01x (liabilities/equity)
• interest_coverage: 723.5x
• assessment: Moderate leverage with strong interest coverage indicates low near-term solvency risk. capital_structure: Balance sheet is conservatively positioned with roughly mid-40s equity ratio and minimal interest burden, affording financial flexibility.

Cash Flow Quality

earnings_quality: Cannot be fully evaluated due to unreported cash flow data; ordinary income alignment with operating income suggests earnings are primarily operating-derived. FCF_analysis: Operating CF and investing CF were unreported, so free cash flow cannot be determined. Capex intensity and working capital movements are key unknowns. working_capital: Inventories stand at ¥1.93bn; current asset base is healthy. Without OCF, we cannot assess cash conversion or inventory turns.

Dividend Sustainability

payout_ratio_assessment: EPS is ¥67.88, but DPS is shown as 0.00 in the dataset, likely indicating undisclosed data rather than no dividend. A payout ratio cannot be reliably assessed from the provided figures. FCF_coverage: Not assessable due to unreported OCF/FCF. Coverage metrics would be speculative. policy_outlook: With solid liquidity and moderate leverage, the balance sheet could support dividends; however, near-term margin pressure may bias toward retention unless cost pressures ease. Confirmation requires actual dividend policy disclosures.

Risk Assessment

Business Risks:

• Raw material cost inflation (potatoes, edible oils, seasonings) and energy/logistics costs pressuring margins
• Pricing power and consumer elasticity risk in a competitive snack market
• Product mix shifts and promotional spending potentially diluting margins
• Brand and new product execution risk
• Supply chain disruptions affecting procurement and manufacturing continuity

Financial Risks:

• Operating leverage risk if SG&A and fixed manufacturing costs outpace revenue growth
• Potential working capital build (inventories/receivables) absent corresponding cash conversion
• Tax rate variability impacting net margins (implied ~36–37% effective rate in the period)
• Currency exposure on imported inputs (if applicable), affecting COGS volatility

Key Concerns:

• 30.2% YoY decline in operating income despite 3.7% sales growth
• Compression of operating margin to ~4.8%
• Lack of disclosed cash flow data limiting assessment of cash generation and FCF

Investment Implications

Key Takeaways:

• Topline growth of 3.7% YoY indicates steady demand/pricing, but profit contraction signals cost pressure.
• Gross margin at 31.0% is reasonable, yet SG&A and/or input costs are weighing on operating margin.
• ROE at 3.72% is modest given leverage of 2.22x, highlighting margin constraints as the main drag.
• Liquidity is strong (current ratio 151%, quick ratio 135%) and leverage moderate (liabilities/equity ~1.01x).
• Interest burden is negligible (coverage ~724x), reducing financial risk.
• Cash flow metrics are unreported; monitor OCF and capex to validate earnings quality.
• Implied equity ratio is around 45%, suggesting a sound capital base.

Metrics to Watch:

• Operating margin trajectory and SG&A ratio to sales
• Gross margin sensitivity to raw material and logistics costs
• Pricing/mix realization versus volume trends
• Operating cash flow, working capital turns, and capex
• Tax rate normalization versus historical levels
• Inventory levels relative to sales (to gauge demand and supply alignment)

Relative Positioning: Within the domestic snack foods space, KoiKeya exhibits solid balance-sheet strength and minimal interest burden but currently lower profitability and ROE versus typical leading peers; fixing operating margin compression is key to narrowing 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