| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4723.1B | ¥4445.5B | +6.2% |
| Operating Income / Operating Profit | ¥104.8B | ¥51.4B | +103.7% |
| Ordinary Income | ¥117.3B | ¥63.9B | +83.5% |
| Net Income / Net Profit | ¥97.6B | ¥31.8B | +206.7% |
| ROE | 6.9% | 2.5% | - |
The fiscal year ended February 2026 delivered revenue of ¥4723.1B (YoY +¥277.7B +6.2%), Operating Income of ¥104.8B (YoY +¥53.4B +103.7%), Ordinary Income of ¥117.3B (YoY +¥53.4B +83.5%), and Net Income of ¥97.6B (YoY +¥66.0B +206.7%), achieving higher sales and substantially higher profits. Revenue was driven by the Meat Manufacturing & Wholesale business (composition 92.3%, +5.8%), and gross margin improved to 11.4% (prior 10.2%, +1.2pt) supported by pass-through price initiatives, mix improvement, and manufacturing efficiency. Operating margin expanded to 2.2% (prior 1.2%, +1.0pt) and Ordinary Income margin to 2.5% (prior 1.4%, +1.1pt). Net Income rose materially due to recognition of Extraordinary Gains totaling ¥44.1B, including gains on sale of investment securities ¥26.1B and gains on sales of fixed assets ¥13.5B, lifting net margin to 2.1% (prior 0.7%, +1.4pt). Operating Cash Flow was positive at ¥87.5B (+18.6%), but accounts receivable increased by ¥91.5B, pressuring working capital; capital expenditures of ¥101.0B (2.3x depreciation) were made, resulting in Free Cash Flow of ¥6.1B, a tight level. Total assets increased to ¥2,514.4B (+¥208.5B) and Net Assets to ¥1,406.7B (+¥108.1B), with the Equity Ratio maintained at 55.9% (prior 56.3%), preserving financial soundness.
[Revenue] Revenue was ¥4723.1B (YoY +6.2%), showing solid growth. Meat Manufacturing & Wholesale revenue was ¥4436.7B (+5.8%, composition 92.3%), leading growth; Meat Retail was ¥249.4B (+3.3%, composition 5.2%); Meat Foodservice was ¥105.7B (+20.3%, composition 2.2%), achieving double-digit growth though small scale. By region, Japan was ¥4094.6B (+6.8%, composition 86.7%) performing well as the core market; the U.S. was ¥548.7B (+0.9%, composition 11.6%) largely flat; Other was ¥79.8B (+14.6%, composition 1.7%) showing expansion in small markets. Price revisions and mix improvement raised unit selling prices and supported volume growth.
[Profitability] Gross margin improved to 11.4% (prior 10.2%, +1.2pt) due to manufacturing efficiency, yield improvements and price pass-through; gross profit rose to ¥536.4B (+¥90.9B +20.4%). SG&A was ¥431.6B (+¥33.4B +8.4%), with an SG&A ratio of 9.1% (prior 9.1%, flat), indicating solid cost control. Operating Income doubled-plus to ¥104.8B (+¥53.4B +103.7%). Non-operating items included interest income ¥4.3B, dividend income ¥6.1B, foreign exchange gains ¥2.1B, offset by interest expense ¥6.3B, producing net non-operating income of +¥12.5B. Ordinary Income was ¥117.3B (+¥53.4B +83.5%). Extraordinary items included Extraordinary Gains of ¥44.1B (including gains on sale of investment securities ¥26.1B and gains on sales of fixed assets ¥13.5B), offset by Extraordinary Losses of ¥9.8B (including impairment losses ¥2.8B and disaster losses ¥2.0B), yielding a net contribution of +¥34.3B to pre-tax profit. Profit before tax was ¥151.6B (+133.1%), income taxes were ¥53.9B (effective tax rate 35.6%), and non-controlling interests were ¥5.3B, resulting in Net Income attributable to owners of parent of ¥97.6B (+206.7%). One-off gains largely drove the jump in final profit. By segment, Meat Manufacturing & Wholesale delivered ¥98.9B (prior ¥43.5B, +127.2%) with an improved margin of 2.2% (prior 1.0%, +1.2pt), leading the company; Meat Retail posted ¥11.9B (prior ¥13.1B, ▲9.4%) with margin 4.8% (prior 5.4%, ▲0.6pt); Meat Foodservice ¥4.1B (prior ¥4.9B, ▲15.6%) with margin 3.9% (prior 5.5%, ▲1.6pt), reflecting deteriorated profitability in retail and foodservice. In conclusion, the revenue and profit growth drivers were price pass-through and manufacturing efficiency in the core Meat Manufacturing & Wholesale business; improving profitability in Retail and Foodservice remains a future task.
The Meat Manufacturing & Wholesale business recorded Revenue ¥4436.7B (YoY +5.8%) and Operating Income ¥98.9B (YoY +127.2%), with the core segment driving substantial profit growth. Operating margin improved to 2.2% (prior 1.0%, +1.2pt) as price pass-through and manufacturing efficiencies took hold, benefiting the most from gross margin improvements. Meat Retail achieved Revenue ¥249.4B (+3.3%) but Operating Income decreased to ¥11.9B (▲9.4%), with Operating margin down to 4.8% (prior 5.4%, ▲0.6pt), likely pressured by store operating costs and higher labor costs. Meat Foodservice achieved Revenue ¥105.7B (+20.3%) but Operating Income fell to ¥4.1B (▲15.6%), with Operating margin down to 3.9% (prior 5.5%, ▲1.6pt); as foodservice demand recovers, start-up costs and higher labor costs have preceded profitability. Other businesses (refrigerated warehousing, etc.) posted Revenue ¥16.9B (+9.9%) and Operating Income ¥1.8B (+46.3%), contributing despite small scale. After deducting corporate expenses of ¥15.6B, consolidated Operating Income was ¥104.8B, with profitability improvements in Manufacturing & Wholesale offsetting softer results in other segments to produce overall profit growth.
[Profitability] Operating margin was 2.2% (prior 1.2%, +1.0pt), Ordinary Income margin 2.5% (prior 1.4%, +1.1pt), and Net Income margin 2.1% (prior 0.7%, +1.4pt), improving at each stage. Gross margin was 11.4% (prior 10.2%, +1.2pt) aided by price pass-through and manufacturing efficiency, while SG&A ratio remained 9.1% (prior 9.1%, flat), indicating controlled costs. ROE improved to 6.9% (prior 2.2%) though excluding one-off net income contributions the level is modest. ROA improved to 4.9% (prior 2.8%). [Cash Quality] Operating Cash Flow / Net Income ratio was 0.90x and broadly consistent, but Operating CF / EBITDA was 0.59x, indicating low cash conversion efficiency. The main cause was accounts receivable increase of ¥91.5B expanding working capital; inventory decline ¥10.6B and trade payables increase ¥26.6B partially offset this. FCF was ¥6.1B positive, but capital expenditures of ¥101.0B (2.3x depreciation) left FCF coverage at 0.18x, a tight level. [Investment Efficiency] Total asset turnover was 1.88x (prior 1.93x), remaining high; days sales outstanding extended to 39.2 days (prior 33.4 days), highlighting credit management tightening as an issue. Inventory turnover days were 26.2 days (prior 26.9 days), stable and indicating good inventory efficiency. Construction in progress was ¥335.9B, accounting for 38.8% of tangible fixed assets, indicating large investment projects underway. Goodwill is ¥3.4B (0.2% of net assets), minimal with limited impairment risk. [Financial Soundness] Equity Ratio is 55.9% (prior 56.3%), solid; current ratio 220.1%, quick ratio 172.3%, indicating strong short-term liquidity. Debt-to-capital ratio was 0.79x, Debt/Equity 0.36x, maintaining a conservative capital structure. Cash and deposits of ¥377.6B cover short-term interest-bearing debt (short-term borrowings ¥85.9B + long-term borrowings due within 1 year ¥82.2B + bonds maturing within 1 year ¥1.0B) totaling ¥169.1B by 2.2x, mitigating liquidity risk. Debt/EBITDA was 3.30x, near the upper bound of investment-grade range, but interest coverage was 16.6x, indicating strong ability to service interest.
Operating CF rose to ¥87.5B (YoY +18.6%), generally consistent at 0.90x of Net Income ¥97.6B. Operating cash inflow before working capital was ¥120.5B (+15.4%), reflecting improved pre-tax profits and depreciation expense of ¥43.5B as a main driver. In working capital, accounts receivable increase of ¥91.5B was the largest cash outflow, partially offset by inventory decrease ¥10.6B and trade payables increase ¥26.6B. After tax payments of ¥38.1B, net Operating CF was ¥87.5B. Investing CF was ▲¥81.4B (prior ▲¥150.2B), reflecting reduced outflows but with capital expenditures of ¥101.0B (2.3x depreciation) prioritized for growth. Proceeds from sale of tangible fixed assets ¥21.2B and sale of investment securities ¥44.3B partially offset investment spend. FCF turned positive to ¥6.1B (prior ▲¥76.4B) but capacity remains tight given high capex. Financing CF was ▲¥42.4B: proceeds from long-term borrowings ¥102.6B were offset by repayment of long-term borrowings ¥83.4B, reduction in short-term borrowings ¥27.9B, and dividend payments ¥30.7B (including ¥1.0B to non-controlling interests), resulting in net outflow of ▲¥42.4B. Cash and cash equivalents decreased from ¥412.8B at the beginning of the period to ¥374.8B at period-end, a decline of ▲¥37.9B, though on-hand liquidity remained sufficient. Operating CF / EBITDA at 0.59x indicates significant room to improve cash conversion efficiency; strengthening accounts receivable collection and bringing Construction in Progress into operation to boost Operating CF will be key going forward.
Ordinary Income of ¥117.3B versus Profit before tax of ¥151.6B shows a difference of ¥34.3B attributable to net Extraordinary items, indicating significant one-off factors. The composition of Extraordinary Gains ¥44.1B is mainly gains on sale of investment securities ¥26.1B (59.2% of the total), gains on sale of fixed assets ¥13.5B (30.6%), and negative goodwill ¥0.4B, all non-recurring asset disposals / M&A gains with low repeatability in subsequent periods. Extraordinary Losses totaled ¥9.8B (including impairment losses ¥2.8B, up from ¥0.1B prior year, and disaster losses ¥2.0B), with impairments centered on Foodservice and Retail segments as profitability tightening continued. Non-operating income ¥21.0B (dividend income ¥6.1B, interest income ¥4.3B, FX gains ¥2.1B, etc.) is mainly recurring financial income and considered relatively stable. Non-operating expenses are chiefly interest expense ¥6.3B and represent ordinary financing costs. Comprehensive income was ¥139.2B, ¥41.6B above Net Income ¥97.6B, mainly due to an increase in valuation differences on available-for-sale securities of ¥42.2B, indicating unrealized gains on held investment securities serving as a buffer. Comprehensive income attributable to owners of parent was ¥133.2B, contributing to balance sheet strength. From an accrual perspective, Operating CF ¥87.5B fell ¥10.1B short of Net Income ¥97.6B, largely explained by accounts receivable increase ¥91.5B expanding working capital. The accounts receivable rise appears structural with revenue growth, but stricter credit management and shortened collection cycles are essential to improve earnings quality. Core earnings on an Operating Income basis were ¥104.8B, more than double YoY, indicating that excluding one-offs, underlying profitability has steadily improved.
The Full Year guidance was left unchanged at Revenue ¥5000.0B (YoY +5.9%), Operating Income ¥100.0B (YoY ▲4.5%), Ordinary Income ¥110.0B (YoY ▲6.2%), and Net Income attributable to owners of parent ¥65.0B (YoY ▲33.4%). Actuals reached Revenue ¥4723.1B (94.5% of guidance), missing the top-line, but Operating Income ¥104.8B (104.8% of guidance), Ordinary Income ¥117.3B (106.6% of guidance), and Net Income ¥97.6B (150.2% of guidance) significantly exceeded expectations on the profit side. The full-year guidance had assumed lower Operating and Ordinary Income year-on-year, but actuals achieved profit growth through price pass-through and manufacturing efficiency, and Extraordinary Gains further pushed final profit 50.2% above forecast. EPS was ¥291.70 (guidance ¥205.22), substantially surpassing expectations, and dividends were increased from the forecast annual ¥55 to a year total of ¥104 (interim ¥52 and year-end ¥52), far exceeding prior guidance. The revenue shortfall may reflect external environment changes and conservative sales planning, but margins and one-off gains propelled profits well above forecast. The ¥44.1B Extraordinary Gains compared to forecast were the main driver of Net Income upside; assuming loss of these one-off gains next fiscal year, sustainability of core earnings becomes the focal point. No revised guidance has been announced at this time; while there is room for upward revision given strong results, low repeatability of one-offs means ongoing improvement on an operating basis is critical.
Annual dividend was ¥104 (interim ¥52, year-end ¥52), an increase of ¥60 from prior year ¥44 (+136.4%). Payout Ratio was 36.3% (based on EPS ¥291.70), at an appropriate level, showing a policy of returning increased profit to shareholders. Operating CF was ¥87.5B and cash dividends to owners of parent totaled ¥30.7B, covering 35.1% of Operating CF, with OCF coverage at 2.8x, indicating ample capacity to pay dividends. However, FCF was ¥6.1B, significantly below dividend payments ¥30.7B, meaning dividends were funded from Operating CF and cash buffers while prioritizing capital expenditures. No share buybacks were executed; total shareholder returns consist solely of dividends. Payout Ratio of 36.3% is sustainable given profit levels, but in a period of weak FCF generation future dividend increases depend on normalization of working capital (strengthened AR collection) and increased Operating CF as Construction in Progress is brought online. In the medium term, if core earnings growth and FCF improvement proceed, raising payout ratio and stable dividend increases would be feasible. Current dividend policy is profit-linked and flexible; given the transitory nature of Extraordinary Gains, securing dividend sources from core earnings will be key from next fiscal year onward.
Raw material price & FX risk: Meat raw material procurement costs are highly dependent on international commodity markets and exchange rates, creating volatility for gross margins. This period absorbed cost pressure via price pass-through and FX gains of ¥2.1B, but adverse market movements could significantly compress margins. While FX gains were recorded in non-operating income, FX losses of ¥0.4B were also recorded, indicating hedged/offsetting FX positions. Further yen depreciation or raw material cost increases could temporarily pressure margins if price pass-through lags.
Business concentration risk in Meat Manufacturing & Wholesale: 92.3% of revenue is derived from Meat Manufacturing & Wholesale, indicating very high dependence on this segment. Market fluctuations, intensified competition, or supply shortages in this segment would directly impact consolidated performance. Profit deterioration in Foodservice and Retail is already evident; delayed rebalancing across segments could slow company-wide margin improvement.
Risk of consumption of Construction in Progress and increased depreciation burden: Construction in Progress stands at ¥335.9B (38.8% of tangible fixed assets) with large investment projects underway; commencement of operations will increase depreciation expense and could pressure Operating Income. Depreciation was ¥43.5B (prior ¥43.7B) and has been stable, but full-scale operation of CIP could materially increase depreciation. Delays in start-up costs or slower productivity improvements could delay expected cost reduction benefits and dampen the trend of Operating margin improvement.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.2% | 5.0% (3.3%–8.4%) | -2.8pt |
| Net Margin | 2.1% | 3.2% (1.9%–6.6%) | -1.1pt |
Profitability is below the industry median, but YoY improvement (Operating Margin +1.0pt, Net Margin +1.4pt) is substantial, suggesting the company may rank highly on improvement pace within the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 6.2% | 5.4% (1.0%–8.6%) | +0.8pt |
Revenue growth exceeds the industry median, placing the company above average on growth.
※ Source: Company compilation
Gross margin improved by +1.2pt driven by price pass-through and manufacturing efficiency, and Operating Income more than doubled YoY, clearly demonstrating a margin improvement trend within a low-margin model. The core Meat Manufacturing & Wholesale segment raised Operating margin from 1.0% to 2.2%, leading the company’s earnings power improvement. However, persistent profitability deterioration in Retail and Foodservice leaves correcting inter-segment profitability disparities as a medium-term priority.
Net Income rose sharply due to Extraordinary Gains of ¥44.1B (gains on sale of investment securities ¥26.1B, gains on sale of fixed assets ¥13.5B, etc.), but assuming the lapse of these one-off gains next fiscal year, sustained improvement in core earnings (Operating Income basis) will be the source of shareholder value. Comprehensive income improved balance sheet health via an increase of ¥42.2B in valuation differences on available-for-sale securities, with unrealized gains on investment securities functioning as a buffer.
Operating CF / EBITDA at 0.59x indicates low cash conversion efficiency, with accounts receivable increase ¥91.5B expanding working capital as a key issue. With Construction in Progress of ¥335.9B (38.8% of tangible fixed assets) coming online, the company faces simultaneous productivity improvement potential and increased depreciation burden; improving FCF generation is essential to balance dividend sustainability and growth investment. Debt/EBITDA 3.30x and Interest Coverage 16.6x indicate solid financial capacity, but normalization of working capital and the pace of large investment digestion will determine future cash flow quality.
This report was auto-generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company from publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.