| Metric | This Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1089.8B | ¥1139.1B | -4.3% |
| Operating Income / Operating Profit | ¥-21.1B | ¥-23.3B | -75.4% |
| Profit Before Tax | ¥-20.7B | ¥-39.0B | +46.9% |
| Net Income / Net Profit | ¥-8.6B | ¥-42.1B | +79.7% |
| ROE | -0.4% | -1.9% | - |
For the Q1 of the fiscal year ending March 2026 (Jan–Mar), Revenue was ¥1,089.8B (YoY ▲¥49.3B ▲4.3%), Operating loss was ¥21.1B (improved ¥2.2B from prior-year operating loss of ¥23.3B), Ordinary loss (経常損失) was ¥20.7B (improved ¥18.2B from prior-year ordinary loss of ¥38.9B), and quarterly Net loss attributable to owners of the parent was ¥8.8B (improved ¥33.4B from prior-year Net loss of ¥42.2B, +79.2%). While revenue decline continued, a large improvement in gross margin and profit contributions from non-continuing businesses substantially reduced the final period loss. Gross margin improved to 32.3% (up +2.1pt from 30.2% a year earlier), reflecting progress on price revisions and mix optimization; however, Operating margin remained negative at ▲1.9%. Quarterly profit from non-continuing operations was ¥3.7B (improved ¥4.6B from prior-year ▲¥0.9B), suggesting progress in asset portfolio restructuring. On a continuing-operations basis, the quarterly loss was ¥12.3B (improved from prior-year ▲¥41.2B), indicating that structural improvements in core operations are still incomplete.
Revenue was ¥1,089.8B (YoY ▲4.3%). By segment, Domestic Business was ¥805.1B (▲7.8%) with significant decline, while Overseas Business was ¥284.7B (+7.0%) and grew, with weakness in Domestic operations driving the company-wide revenue decline. Domestic weakness reflected soft demand for alcoholic beverages and beverages plus seasonally weak Q1 (the company notes “Q1 tends to be lower than other quarters”), widening the revenue decline. Overseas continued to grow led by alcoholic beverages, with currency effects and higher sales volumes likely contributing. Revenue mix was Domestic 73.9% / Overseas 26.1%, indicating high domestic dependence as a driver of volatility.
Cost of goods sold was ¥737.6B (vs ¥794.9B prior year, ▲7.2%), compressing more than the revenue decline; Gross profit was ¥352.2B (vs ¥344.2B, +2.3%). Gross margin improved materially to 32.3% (up +2.1pt) driven by price revisions, lower raw material costs, and mix optimization. SG&A was ¥346.3B (vs ¥354.2B, ▲2.2%), but SG&A ratio rose to 31.8% (vs 31.1%, +0.7pt) reflecting the relative burden of lower sales. Operating loss was ¥21.1B (improved ¥2.2B from prior-year ▲¥23.3B) — the deficit narrowed but remains negative. Other operating income increased to ¥19.2B (vs ¥13.6B), likely including asset-sale related gains, while Other operating expenses rose to ¥46.1B (vs ¥26.9B), mainly due to impairment losses of ¥28.3B (vs ¥25.0B), indicating significant one-off charges. Finance income was ¥10.2B and finance costs ¥9.8B, roughly balanced. Profit before tax on continuing operations was a loss of ¥20.7B (improved from prior-year ▲¥38.9B); corporate income tax was ▲¥8.4B (tax burden factor 0.407), yielding a continuing-operations quarterly loss of ¥12.3B (a large improvement from prior-year ▲¥41.2B). Adding quarterly profit from non-continuing operations of ¥3.7B (vs prior-year ▲¥0.9B) produced a quarterly loss of ¥8.6B and Net loss attributable to owners of the parent of ¥8.8B (improved +79.2% vs prior-year ▲¥42.2B). Segment operating profits: Domestic ¥7.8B (vs ¥11.2B, ▲30.3%), Overseas ▲¥4.0B (vs ▲¥12.8B, +68.5% improvement), Adjustments ▲¥24.9B (vs ▲¥21.7B) — the increase in adjustments (corporate-level costs) pressured margins. In summary: revenue down but gross-profit up on continuing operations; company-wide revenue decline plus impairments on the bottom line.
Domestic Business: Revenue ¥805.1B (vs ¥873.0B, ▲7.8%), Operating profit ¥7.8B (vs ¥11.2B, ▲30.3%), Operating margin 1.0%. Composed of domestic alcoholic beverages, foodservice, and domestic food & beverages; weak alcohol demand and seasonality drove the revenue decline. Higher SG&A ratio limited profit gains, so benefits from gross-margin improvement have not fully flowed through to operating profit.
Overseas Business: Revenue ¥284.7B (vs ¥266.1B, +7.0%), Operating loss ▲¥4.0B (vs ▲¥12.8B, loss amount improved 68.5%), Operating margin ▲1.4%. Composed of overseas alcoholic beverages and beverages; revenue growth and absorption of fixed costs sharply reduced losses. Foreign exchange effects and expanded sales likely contributed.
Adjustments (corporate) were ▲¥24.9B (vs ▲¥21.7B), and higher corporate overheads weighed on overall margins. The core positive-contributing segment to consolidated operating profit was Domestic, but Overseas is improving faster in both growth and profitability.
Profitability: Operating margin ▲1.9% (vs ▲2.0%, +0.1pt), Net margin ▲0.8% (vs ▲3.7%, +2.9pt). Operating-stage loss narrowed and non-continuing-business profitability turned positive, improving loss rates, but still negative. Gross margin 32.3% (vs 30.2%, +2.1pt) reflects the effects of price revisions and lower raw material costs, indicating structural improvement. ROE ▲0.4% (vs ▲1.9%) remains negative; decomposition: Net margin ▲0.8% × Total asset turnover 0.17x × Financial leverage 2.95x. Total asset turnover is low and affected by quarterly seasonality.
Cash quality: Operating Cash Flow (OCF) ▲¥18.8B (relative to Net loss ▲¥8.6B gives OCF/Net income 2.14x, but both negative so actual cash generation cannot be confirmed), Free Cash Flow ▲¥28.5B — cash flow is negative. Accrual ratio 0.2% (Operating CF +18.8B / Total assets ¥6,379.7B ≒ 0.3%) is formally conservative, but with negative OCF cash generation quality is hard to evaluate.
Investment efficiency: Capital expenditures ¥33.2B are below depreciation ¥45.9B, indicating maintenance-level investment. Investment properties ¥731.6B (vs ¥826.1B, ▲11.4%) show progress in disposals and asset efficiency. Assets held for sale ¥1,829.1B (vs ¥1,685.8B, +8.5%) increased and will influence full-year profit and cash flow depending on disposal progress.
Financial soundness: Equity ratio 33.7% (vs 33.5%), Interest-bearing debt total ¥1,808.1B (vs ¥1,705.9B), Debt-to-equity ratio 1.95x — somewhat high, but current ratio 161% (Current assets ¥3,313.2B / Current liabilities ¥2,058.7B) indicates short-term liquidity secured. Cash and deposits ¥212.9B; EBIT ▲¥21.1B makes interest coverage calculation infeasible and tolerance to interest burden is weak.
Operating CF was ▲¥18.8B (vs +¥52.7B prior year, ▲135.6%). Pre-working-capital subtotal of Operating CF was ¥33.7B (vs ¥130.8B, ▲74.2%), with lower depreciation ¥45.9B (vs ¥57.4B), continued EBIT loss, and impairment losses ¥28.3B reducing cash inflows. Decrease in trade receivables +¥258.2B (vs +¥209.8B) was a major positive contribution indicating accelerated collections, while increases in inventories ▲¥31.1B (vs ▲¥25.8B), decrease in trade payables ▲¥31.0B (vs ▲¥30.5B), corporate tax payments ▲¥43.6B (vs ▲¥70.0B), and other working-capital declines ▲¥68.8B (vs +¥49.9B) were cash outflows, so overall working-capital build and tax payments drove cash outflows.
Investing CF was ▲¥9.8B (vs ▲¥33.4B), with reduced outflows. Key outflows were capital expenditures ▲¥33.2B and investment property acquisitions ▲¥13.9B, while proceeds from sale of tangible fixed assets +¥45.5B (vs +¥15.6B) increased substantially and investment property sale proceeds +¥3.4B contributed, confirming progress in asset disposals.
Financing CF was +¥48.0B (vs ▲¥23.6B), indicating net funding. Short-term borrowings increased +¥71.0B and commercial paper increased +¥180.0B to secure liquidity, while long-term borrowings repayment ▲¥125.0B and dividend payments ▲¥68.3B (vs ▲¥39.4B) were outflows. After foreign exchange effects +¥3.3B, Cash and cash equivalents increased by +¥22.8B to ¥212.9B. Considering cash included in assets held for sale ▲¥33.5B, the effective cash position is limited, so tightening working capital and generating cash from asset disposals in H2 is urgent.
Operating revenue is based on recurring activities in alcoholic beverages, beverages, and foodservice, but Other operating income ¥19.2B (1.8% of sales) likely includes asset-sale related income and contains temporary elements. Other operating expenses ¥46.1B (4.2% of sales) include impairment losses ¥28.3B, indicating significant non-recurring charges. Finance income ¥10.2B and finance costs ¥9.8B are roughly balanced and finance net is minor. Quarterly profit from non-continuing operations ¥3.7B (vs ▲¥0.9B) is a one-off benefit from asset-portfolio restructuring and should be distinguished from recurring earnings. Corporate income tax ▲¥8.4B (tax burden factor 0.407) is relatively high against continuing-operations pre-tax loss ¥20.7B, suggesting valuation allowances or temporary differences. Operating CF ▲¥18.8B is below Net loss ▲¥8.6B, but both negative so accrual quality is quantitatively hard to assess. Large decrease in trade receivables is positive for cash quality due to accelerated collection, while inventory increases and payable decreases negatively affected working-capital cash quality. The divergence between ordinary income and net income is driven by non-continuing gains and tax effects; excluding non-continuing operations, recurring profitability and net operating results largely align. Overall, impairments and asset disposals are materially affecting results, while structural improvement in gross margin suggests uplift in recurring earning power.
Full-year forecast: Revenue ¥5,050.0B (YoY ▲75.4% — though full-year prior figure not stated, the memo suggests a large expected revenue decline based on the stated YoY for operating profit), Operating profit ¥60.0B (YoY ▲75.4%), Net income attributable to owners of the parent ¥2,960.4B, EPS forecast ¥759.28, Dividend forecast ¥20.00 per share. Q1 results (Revenue ¥1,089.8B) represent 21.6% of the full-year forecast (standard quarterly run-rate 25% implies ▲3.4pt below), and Operating loss ¥21.1B reflects negative progress vs full-year plan, indicating underperformance in H1. Given full-year Net income forecast ¥2,960.4B vs Q1 loss ▲¥8.8B, the full-year plan appears to assume large asset-sale gains and substantial business profit recovery in H2. Disposal progress of assets held for sale ¥1,829.1B is key to full-year achievement. No revisions to FY guidance or dividend forecast were announced for Q1; the company maintains an H2-weighted plan. Considering seasonality (Q1 is a low-demand period) and dependence on timing of asset disposals, H1 underperformance is within expected range but reliable execution in H2 will be critical.
Dividend payments in Q1 were ¥68.3B (vs ¥39.4B, +73.4%), reflecting payment of the year-end dividend. Full-year dividend forecast is ¥20.00 per share; based on 394M shares outstanding the annual aggregate is approximately ¥78.8B. Against forecast Net income attributable to owners of the parent ¥2,960.4B, the payout ratio is about 2.7%, very low, reflecting that full-year net income includes large one-time gains from asset disposals. Q1 Free Cash Flow was ▲¥28.5B and dividend payments ¥68.3B were not covered by internal cash, so short-term funding was supplemented externally. On a full-year basis, dividend funding is expected to be covered by cash inflows from asset disposals, and the company appears to emphasize stable dividends. A share split (1-for-5? — note: original says 1 share becomes 5 shares, effective Jan 1, 2026) was implemented, effective 2026-01-01; note that FY2025 figures show pre-split dividend amounts. Share buybacks were ¥▲0.0B in the quarter (none executed). Total return ratio is calculated using dividends only and is expected to remain low on a full-year basis; excluding asset-disposal gains, dividends relative to recurring earnings can be considered appropriate.
Continued weak domestic demand and burden of corporate-level costs: Domestic operations account for 73.9% of revenue; continued weakness in alcohol demand, rising health consciousness, and shifts to new categories may sustain revenue declines. Domestic operating margin is slim at 1.0%, and increased promotional and advertising spend or intensifying competition could further erode profitability. Corporate-level costs (Adjustments ▲¥24.9B) contributed to operating losses, so cost containment is urgent. Quantitatively, domestic sales fell ▲7.8% YoY and despite gross-margin improvement +2.1pt, operating profit declined ▲30.3% due to higher SG&A ratio (+0.7pt) and higher corporate costs.
Progress risk for asset disposal plan: Assets held for sale ¥1,829.1B (28.7% of total assets) are large, and full-year Net income forecast ¥2,960.4B depends heavily on disposal gains. Delay or price divergence in disposals risks shifting assumed profits and cash inflows across periods. Q1 delivered non-continuing profit ¥3.7B, indicating partial progress, but achieving the full-year target requires reliable execution in H2. Market value fluctuations or adverse market conditions could also produce disposal losses.
Working-capital cash absorption and refinancing risk: Inventory increase ▲¥31.1B, trade payable decrease ▲¥31.0B, and other working-capital decline ▲¥68.8B contributed to a sharp deterioration in Operating CF to ▲¥18.8B. Short-term borrowings +¥71.0B and CP +¥180.0B secured liquidity, but interest-bearing short-term debt increased to ¥615.9B. In a rising-rate environment, interest cost burden and refinancing risk rise. With negative EBIT, interest coverage is uncalculable and resilience to interest expense is weak; early restoration of positive Operating CF is essential.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating margin | -1.9% | – | – |
| Net margin | -0.8% | – | – |
Both the company’s operating and net margins are negative. Although industry peer data are limited, major beverage and alcohol companies typically secure 5–10% operating margins, suggesting the company lags peers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (YoY) | -4.3% | – | – |
Revenue declined ▲4.3% YoY, reflecting industry maturation and domestic demand weakness. Overseas growth +7.0% supported the consolidated result, but the 73.9% weight of domestic sales drove overall decline.
※ Source: Company compilation
Sustainability of gross-margin improvement and path to operating profitability: Gross margin improved to 32.3% (YoY +2.1pt) showing clear effects from price revisions, mix optimization, and lower raw-material costs. While structural profitability improvements are progressing, SG&A ratio rose to 31.8% (+0.7pt) and Operating margin remains negative at ▲1.9%. Controlling corporate-level costs (Adjustments ▲¥24.9B) and further SG&A compression are key to achieving H2 operating profitability. Continued pace of overseas loss reduction (loss amount improved 68.5%) would help lift consolidated margins and increase the likelihood of attaining full-year Operating profit ¥60.0B. If gross-margin improvement trends persist, medium-term qualitative improvements in the earnings structure can be expected.
Progress of asset-portfolio restructuring and impact on full-year results: Assets held for sale ¥1,829.1B (YoY +8.5%) increased, and Q1 showed partial progress with non-continuing profit ¥3.7B and proceeds from sale of tangible fixed assets ¥45.5B. Full-year Net income forecast ¥2,960.4B is highly dependent on disposal gains, making H2 execution critical. Investment property ¥731.6B (YoY ▲11.4%) is being reduced and the asset-efficiency policy is clear. Timing and amounts of disposals will materially affect full-year earnings and cash flow; continuous monitoring of quarterly disposal trends (balance of assets held for sale and non-continuing P/L) is essential.
This report was automatically generated by AI analyzing XBRL financial statement data and is an earnings analysis document. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company based on public financial data. Investment decisions are your own responsibility; please consult a professional advisor as needed.