| Metric | Current | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥14573.9B | ¥13705.5B | +6.3% |
| Operating Income / Operating Profit | ¥10.8B | ¥-61.5B | +117.5% |
| Profit Before Tax | ¥545.5B | ¥372.0B | +46.6% |
| Net Income | ¥369.2B | ¥278.0B | +32.8% |
| ROE | 6.7% | 5.2% | - |
For the fiscal year ended March 2026, revenue was ¥14573.9B (YoY +¥868.4B +6.3%), Operating Income was ¥10.8B (YoY +¥72.3B, turned to profit), Ordinary Income was ¥199.4B (YoY +¥66.3B +49.9%), and Net Income attributable to owners of parent was ¥350.7B (YoY +¥84.8B +31.9%). Top-line and profit growth were achieved primarily through margin improvement in the core Fresh Meat Business and the penetration of price measures. Although Operating Income turned positive from ¥-61.5B in the prior year, the operating margin remained only 0.1%, and the larger increases at the Ordinary and Net Income stages suggest a significant contribution from non-operating items. ROE improved to 6.6% (prior year 5.1%), supported by higher net margin and a slight increase in total asset turnover. Operating Cash Flow (OCF) was ¥823.4B (+6.3%), generating 2.2x Net Income, and Free Cash Flow was ¥483.0B, covering dividend payments of ¥134.6B by 3.6x. The equity ratio was 53.8%, maintaining financial soundness, and interest-bearing debt was ¥2,285B (short-term ¥479B, long-term ¥1,806B), with a shift toward longer maturities. The FY2027 outlook targets revenue of ¥1,5000B (+2.9%), Net Income attributable to owners of parent of ¥380B (+8.4%), and a dividend of ¥180, assuming recovery in processed foods profitability and stable operations in Fresh Meat.
[Revenue] Revenue was ¥14573.9B (+6.3%), marking the third consecutive year of top-line growth. By segment, the core Fresh Meat Business expanded to ¥9796.1B (+9.5%) with increases in both volume and price, and the Ballpark Business maintained double-digit growth at ¥277.9B (+16.8%). In contrast, the Processed Foods Business was ¥4483.7B (flat), showing a slowdown. Cost of goods sold was ¥12068.1B, gross profit was ¥2505.8B, and gross margin improved to 17.2% (prior year 16.1%, +110bp), confirming progress in price pass-through and mix improvement. Regionally, overseas sales expansion and yen depreciation also supported revenue growth.
[Profitability] SG&A was ¥1929.8B (+4.6%), below sales growth (+6.3%), but Operating Income was only ¥10.8B (prior year -¥61.5B), turning to profit with a very thin operating margin of 0.1%. Other income of ¥168.4B and other expenses of ¥183.2B nearly offset each other. Including financial income ¥40.8B, financial expenses ¥43.3B, and equity-method loss ¥-13.2B, Ordinary Income expanded to ¥199.4B (+49.9%). Profit Before Tax was ¥545.5B (+46.6%), a substantial increase, highlighting the contribution of non-operating items relative to weak operating results. After deducting income taxes of ¥176.3B, Net Income attributable to owners of parent was ¥350.7B (+31.9%), and net margin improved to 2.4% (prior year 1.9%). In conclusion, while revenue and profit increased, operating-level profitability remains fragile and the profit structure shows high dependence on non-operating items.
The Fresh Meat Business recorded revenue of ¥9796.1B (+9.5%), Operating Income of ¥613.0B (+80.5%), and a margin of 6.3%, substantially improving and driving consolidated profit. Stable livestock market conditions, penetration of pricing measures, and improved production efficiency contributed, with assets allocated to the segment at ¥5254.2B. The Processed Foods Business had revenue of ¥4483.7B (flat), Operating Income of ¥71.8B (-28.6%), and a margin of 1.6%, declining due to intensified PB competition and delayed pass-through of higher raw material costs. Assets were ¥3652.8B, still a large allocation, but profitability improvement remains a challenge. The Ballpark Business posted revenue of ¥277.9B (+16.8%), Operating Income of ¥54.2B (+61.9%), and a margin of 19.5%, maintaining high profitability supported by strong attendance and operational efficiencies. Assets were ¥859.6B, relatively small but demonstrating high capital efficiency. Segment profit total was ¥741.3B versus consolidated Operating Income of ¥10.8B, a gap of about ¥730B, indicating a heavy burden from corporate expenses, adjustments, and eliminations that dilute operating-level earnings.
[Profitability] ROE was 6.6% (prior year 5.1%), explained by net margin 2.4% × total asset turnover 1.46x × financial leverage 1.81x. Improvement in net margin by +0.5pt was the primary driver, and total asset turnover increased slightly from 1.44x. Operating margin was 0.1% (prior year -0.4%), turning positive but still very thin; Ordinary Income margin was 1.4% (prior year 1.0%), and net margin was 2.4% (prior year 1.9%), indicating larger improvements at non-operating stages. EBITDA was approximately ¥460.5B (Operating Income ¥10.8B + Depreciation ¥449.7B), and EBITDA margin was 3.2%, indicating limited cash-based earning power. [Cash Quality] OCF of ¥823.4B was 2.3x Net Income ¥350.7B, high quality, aided by depreciation ¥449.7B and increased borrowings. The accrual ratio was -47.3% ((OCF - Net Income) ÷ Total Assets), signaling a cash-driven profit structure. OCF/EBITDA ratio was 1.79x, a healthy level. In working capital, accounts receivable increase -¥138B and inventory increase -¥88B absorbed funds, partially offset by accounts payable increase +¥66B. [Investment Efficiency] Total asset turnover was 1.46x (prior year 1.44x), marginally improved. Capital expenditures were ¥476.7B, exceeding depreciation ¥449.7B, maintaining a growth investment stance. ROIC (≈ EBIT ÷ Invested Capital) was extremely low at about 0.1% due to weak operating income, indicating substantial room to improve capital efficiency. [Financial Soundness] Equity ratio was 53.8% (prior year 55.2%), maintaining soundness; current ratio was about 177% (current assets ¥4,383B ÷ current liabilities ¥2,471B), favorable. Interest-bearing debt was ¥2,285B (short-term ¥479B, long-term ¥1,806B), with short-term -43.9% YoY and long-term +30.4% YoY, reflecting longer maturities. Debt/EBITDA was about 4.96x, relatively high; interest coverage on EBIT basis was 0.25x, and EBITDA/interest expense was 10.6x, indicating heavy leverage relative to operating earnings but adequate cash-based interest coverage.
OCF was ¥823.4B (+6.3%), with Profit Before Tax of ¥545.5B and significant non-cash depreciation of ¥449.7B contributing, and other liabilities increase ¥128.6B also supporting cash generation. In working capital, accounts receivable increase -¥138.5B and inventory increase -¥88.0B absorbed cash, but accounts payable increase ¥65.6B and unpaid corporate tax increase ¥101.0B partially offset, within transient working capital needs associated with growth. After corporate tax payments -¥119.3B and interest payments -¥23.1B, OCF secured 2.3x Net Income. Investing Cash Flow was -¥340.4B, mainly due to capital expenditures -¥476.7B (of which tangible fixed assets acquired -¥344.7B). Proceeds from fixed asset sales ¥32.3B and disposal of other financial assets ¥38.7B partially supplemented, and acquisition of equity-method investments -¥44.4B was also included. As a result, Free Cash Flow was ¥483.0B (OCF ¥823.4B + Investing CF -¥340.4B), up from ¥460.7B in the prior year. Financing Cash Flow was -¥560.0B, driven by dividend payments -¥134.6B and share repurchases -¥300.1B as shareholder returns. Interest-bearing debt saw long-term borrowings raised ¥681.5B, repayments -¥752.8B, and short-term borrowings decreased -¥47.9B, resulting in a net decrease and signs of leverage restraint. Including foreign exchange effects +¥31.9B, year-end cash balance was ¥686.8B (prior year ¥715.6B), a slight decrease. The FCF of ¥483.0B covers dividends of ¥134.6B by 3.6x, but against total of dividend + capex of about ¥611B the coverage ratio is 0.79x, implying that sustaining both growth investment and shareholder returns would require drawing down cash on hand or additional borrowing.
Ordinary Income of ¥199.4B compared with Profit Before Tax of ¥545.5B shows a difference of approximately ¥346B; while net amounts of other income ¥168.4B and other expenses ¥183.2B contribute partly, disclosure is limited and there is high likelihood of one-off factors such as valuation gains or asset sale gains. In non-operating items, financial income ¥40.8B vs. financial expenses ¥43.3B and equity-method loss -¥13.2B nearly offset, so net non-operating contribution is small. Comprehensive income was ¥586.0B, well above Net Income ¥369.2B, with Other Comprehensive Income (OCI) of ¥216.8B. Breakdown includes foreign currency translation differences ¥132.7B, fair value measurement financial assets ¥53.7B, and remeasurement of defined benefit plans ¥25.1B, most of which are valuation or translation items and their conversion to realized cash is deferred to the future. Comprehensive income attributable to owners of parent was ¥564.7B, an OCI add-on of about ¥214B to Net Income ¥350.7B; non-controlling interests were ¥21.3B. Given OCF ¥823.4B is 2.3x Net Income, the accrual ratio of -47.3% indicates cash-driven profits and, on that point, quality of earnings is favorable. However, the expansion of profit from Operating Income ¥10.8B to Ordinary Income +¥188B and Profit Before Tax +¥534B highlights dependence on non-operating and valuation items, warranting caution regarding sustainable earnings power. Inventory increase ¥88B and accounts receivable increase ¥138B reflect growth-related expansion but suggest scope for ongoing efficiency improvements (inventory turnover acceleration, DSO reduction).
The FY2027 full-year forecast projects revenue ¥1,5000B (+2.9%), Ordinary Income ¥222B (+11.4%), Net Income attributable to owners of parent ¥209B (-43.4%), and EPS ¥403.68. Compared with current year Net Income attributable to owners of parent ¥350.7B, the forecasted ¥209B is a large decline, implying that one-off profit-boosting factors in the current year are being phased out. Revenue is expected to grow modestly assuming recovery in processed foods and stable Fresh Meat operations, and an Ordinary Income increase of +11.4% is planned. The dividend forecast is ¥180 (current year ¥160), indicating a dividend increase; payout ratio versus forecast EPS ¥403.68 is about 44.6%, within a sustainable range. Progress rate is difficult to assess since first-half results are not disclosed, but first-half Ordinary Income of ¥199.4B implies about 90% progress toward the full-year Ordinary Income target ¥222B, indicating a plan that expects a weaker second half. The full-year Net Income forecast ¥209B is well below first-half Net Income attributable to owners of parent ¥350.7B, suggesting that temporary profit contributions recognized in the first half are expected to lapse in the second half. Continued pricing measures, trends in raw materials/feed/energy costs, and control of logistics costs will be key to achieving the plan.
This period’s dividend was an interim/terminal combined ¥160 (terminal), with total dividends ¥134.6B (including ¥1.0B to non-controlling interests). The payout ratio relative to Net Income attributable to owners of parent ¥350.7B was about 38.4% (total dividends ÷ Net Income attributable to owners of parent), maintaining a conservative level. Share repurchases amounted to ¥300.1B, increasing treasury stock balance substantially to ¥305.4B at year-end. Total shareholder returns of ¥434.7B (dividends ¥134.6B + share repurchases ¥300.1B) represent a total return ratio of about 90% relative to Free Cash Flow ¥483.0B, a high level. Share repurchases reduced shares outstanding by approximately 3.2% YoY, contributing to ROE and EPS improvement. The FY2027 dividend forecast is ¥180 (+¥20 +12.5%); given forecast Net Income attributable to owners of parent ¥209B, the payout ratio is about 86% (estimated total dividends ¥169B ÷ ¥209B), indicating a shareholder-friendly stance planning increased dividends even under expected profit decline. Continued share buybacks will be judged against FCF; sustaining this year’s large returns (total return ratio 90%) requires further buildup in OCF. The dividend policy appears to target stability linked to medium- to long-term profit growth and cash generation, with a reference payout ratio of 40-50% aiming for stable dividends and flexible increases.
Livestock market and feed price volatility risk: The core Fresh Meat Business is directly affected by livestock market prices and feed costs. Although margins improved to 6.3% this period due to stable markets and price pass-through, reversals or feed cost spikes could rapidly compress gross margins. Biological assets (livestock assets) are recorded at ¥397.0B, and fair value fluctuations can affect earnings. Past operating losses (prior year -¥61.5B) were partly due to market volatility, indicating high sensitivity to external conditions.
Dependence on non-operating items risk: With Operating Income ¥10.8B versus Profit Before Tax ¥545.5B, a gap of about ¥534B exists, and contributions from other income/expenses, valuation gains, and FX effects are significant. Given fragile operating-level profitability (EBIT margin 0.1%), volatility in non-operating items can materially swing profits, posing a risk to sustainable earnings power. The next fiscal year’s forecast showing roughly half Net Income is consistent with the assumption that one-off factors will dissipate.
Leverage and interest rate rise risk: Interest-bearing debt ¥2,285B and Debt/EBITDA ≈ 4.96x are relatively high, and EBIT-based interest coverage is weak at 0.25x. Although maturity extension has mitigated rollover risk, rising interest rates could increase interest burden and refinancing costs. High financial leverage against thin operating earnings reduces resilience in the event of earnings deterioration.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 6.6% | 6.0% (2.6%–11.7%) | +0.6pt |
| Operating Margin | 0.1% | 5.0% (3.3%–8.4%) | -4.9pt |
| Net Margin | 2.5% | 3.2% (1.9%–6.6%) | -0.6pt |
ROE slightly exceeds the industry median, but operating margin underperforms by 4.9pt, indicating weaker operating-level profitability within the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 6.3% | 5.4% (1.0%–8.6%) | +0.9pt |
Revenue growth exceeds the industry median, showing relatively favorable top-line expansion.
※Source: Company compilation
The core Fresh Meat Business achieved substantial margin improvement (Operating Income +80.5%) and pricing measures drove an operating-level return to profitability; however, with an operating margin of only 0.1%, dependence on non-operating items remains high and increases uncertainty for the next fiscal year. The FY2027 plan that halves Net Income attributable to owners of parent (from ¥350.7B actual to ¥209B forecast) implies the phasing out of one-off profit drivers this period, making sustainable improvement in core earnings (EBIT/EBITDA) the top medium-term priority.
OCF of ¥823.4B produced 2.3x Net Income and an accrual ratio of -47.3%, indicating cash-driven profit quality. Free Cash Flow ¥483B covers dividends ¥134.6B by 3.6x, supporting dividend sustainability. However, total shareholder returns (dividends + buybacks) of ¥434.7B represent 90% of FCF, a high level, and continuation of dividend increases (¥180) and buybacks requires further OCF accumulation. While payout ratio is in a sustainable range (around 40%), balancing investment and returns hinges on maintaining and expanding cash generation.
Equity ratio 53.8% and current ratio 177% reflect financial soundness, but Debt/EBITDA ≈ 4.96x implies relatively high leverage and EBIT-based interest coverage of 0.25x indicates a heavy debt burden relative to operating earnings. EBITDA/interest expense of 10.6x secures cash-based interest serviceability, yet buffers are limited in rising-rate or earnings downturn scenarios. Improving operating margin and ROIC to raise capital efficiency is essential to strengthen leverage tolerance.
This report is an earnings analysis document automatically generated by AI from XBRL earnings release data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company from publicly available financial statements. Investment decisions are your own responsibility; please consult a professional as needed.