| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥552.4B | ¥529.6B | +4.3% |
| Operating Income / Operating Profit | ¥15.6B | ¥-14.4B | +152.2% |
| Ordinary Income | ¥4.6B | ¥-22.9B | +472.5% |
| Net Income / Net Profit | ¥-0.2B | ¥-34.5B | +99.3% |
| ROE | -0.0% | -5.3% | - |
The results for FY2027 Q1 (2026-01-21 to 2026-04-20) recorded Revenue ¥552.4B (YoY +¥22.8B +4.3%), Operating Income ¥15.6B (YoY +¥30.0B +152.2%), Ordinary Income ¥4.6B (YoY +¥27.5B +472.5%), and Quarterly Net Income attributable to owners of the parent ¥1.1B (YoY +¥29.6B +99.3%), delivering revenue and profit growth and a return to operating- and ordinary-income profitability. In the prior-year period, the company reported an operating loss of ¥-14.4B, ordinary loss of ¥-22.9B, and net loss of ¥-34.5B, so substantial improvement in the earnings structure was observed. Revenue marked the third consecutive period of growth. The operating margin improved from -2.7% to 2.8% (+5.5pt), gross margin rose to 46.4% (an improvement of +160bp versus prior-year gross profit of ¥23.7B), and SG&A ratio declined to 43.6%, demonstrating operating leverage. The primary drivers were high-margin growth in the Overseas Beverage Business (operating margin 13.9%) and a large reduction in losses in the Domestic Beverage Business, aided by easing logistics and material costs and price/mix improvements.
[Revenue] Revenue ¥552.4B (YoY +4.3%) breakdown: Domestic Beverage Business ¥317.3B (-2.0%), Overseas Beverage Business ¥165.1B (+28.0%), Pharmaceutical-related Business ¥29.7B (-11.5%), Food Business ¥38.5B (-10.1%), Rare Disease Pharmaceuticals Business ¥2.3B (+62.9%). Revenue composition: Domestic Beverage 57.4%, Overseas Beverage 29.9%, Food 7.0%, Pharmaceutical-related 5.4%, Rare Disease Pharmaceuticals 0.4%. The growth engine was Overseas Beverage, which recorded a revenue increase of ¥+35.6B YoY driven by yen depreciation effects and expanded sales in local markets. Conversely, Domestic Beverage was weak at -¥6.4B YoY due to intensified market competition and weather factors; Food declined -¥4.3B due to reduced demand from foodservice; Pharmaceutical-related fell -¥3.9B due to channel adjustments. Rare Disease Pharmaceuticals, while small, maintained high growth as an early-stage business with +¥0.9B. By segment, Overseas Beverage alone exceeded the companywide revenue increase, highlighting concentration of growth drivers within the portfolio.
[Profitability] Cost of sales ¥296.2B (cost of sales ratio 53.6%), gross profit ¥256.2B (gross margin 46.4%), an improvement of +1.6pt from prior-year gross margin of 44.8%. SG&A ¥240.6B (SG&A ratio 43.6%) decreased ¥11.2B from ¥251.8B in the prior year, and SG&A as a percentage of sales declined -3.9pt from 47.5% previously. As a result, Operating Income improved significantly by ¥+30.0B to ¥15.6B from an operating loss of ¥-14.4B in the prior year; Operating Margin improved to 2.8% from -2.7% (+5.5pt). By segment, Overseas Beverage delivered Operating Income ¥22.9B (Operating Margin 13.9%), alone exceeding consolidated operating income; Domestic Beverage narrowed its operating loss to ¥1.9B from ¥-23.9B prior year, a reduction of ¥22.0B (+92.2% improvement); Food recorded an operating loss of ¥1.7B (worsened by ¥-2.8B from prior-year operating income ¥1.1B); Pharmaceutical-related posted Operating Income ¥0.5B (down ¥1.1B from ¥1.6B prior year); Rare Disease Pharmaceuticals had an operating loss of ¥0.4B (improved by ¥0.5B from ¥-0.9B prior year), operating margin -17.5%. Non-operating items included interest income ¥3.3B, interest expense ¥3.7B, and foreign exchange loss ¥0.4B within non-operating expenses totaling ¥16.7B, producing a non-operating net burden of ¥-11.0B. Consequently, Ordinary Income turned positive to ¥4.6B (improved ¥27.5B from prior-year ordinary loss ¥-22.9B). Pre-tax income ¥4.6B faced corporate taxes of ¥4.8B (effective tax rate 105%), and after adjusting for loss attributable to non-controlling interests ¥1.3B, Quarterly Net Income attributable to owners of the parent was ¥1.1B (improved ¥29.6B from prior-year net loss attributable to owners ¥-28.5B). In conclusion, revenue and profit growth were achieved owing to high-margin growth in Overseas Beverage and substantial profitability improvements in Domestic Beverage, resulting in turnaround at the operating and ordinary income stages; however, high tax burden narrowed the improvement at the net income level.
The Domestic Beverage Business posted Revenue ¥317.3B (-2.0%) and an operating loss ¥1.9B (improved +92.2% from prior-year operating loss ¥23.9B). Operating margin was -0.6% — still negative, but the loss narrowed significantly as price revisions and cost-efficiency measures took effect. The Overseas Beverage Business achieved Revenue ¥165.1B (+28.0%), Operating Income ¥22.9B (+135.7%), and Operating Margin 13.9%, maintaining high profitability. Yen weakness and brand penetration in local markets contributed, with Overseas Beverage alone surpassing consolidated operating profit. The Pharmaceutical-related Business recorded Revenue ¥29.7B (-11.5%), Operating Income ¥0.5B (-66.5%), Operating Margin 1.8% — revenue and profit declined due to distribution channel adjustments, reducing margins. The Food Business had Revenue ¥38.5B (-10.1%), operating loss ¥1.7B (deteriorated -249.1% from prior-year operating income ¥1.1B), Operating Margin -4.3% — demand reduction from foodservice and fixed-cost burdens pressured earnings. The Rare Disease Pharmaceuticals Business (DyDoPharma) posted Revenue ¥2.3B (+62.9%), operating loss ¥0.4B (improved +54.5% from prior-year operating loss ¥0.9B), Operating Margin -17.5% — still in an upfront investment phase, high growth continues but losses persist. Against consolidated Operating Income ¥15.6B, Overseas Beverage contributed ¥22.9B (147% of consolidated), while Domestic Beverage, Food, and Rare Disease Pharmaceuticals combined had aggregate losses of ¥-4.0B, Pharmaceutical-related contributed +¥0.5B, and adjustments totaled -¥3.8B — indicating extreme dependence on Overseas Beverage.
[Profitability] Operating Margin 2.8% (improved +5.5pt from -2.7% prior year), Gross Margin 46.4% (improved +1.6pt from 44.8% prior year), SG&A Ratio 43.6% (improved -3.9pt from 47.5% prior year) — significant improvement at the operating level. Net Profit Margin 0.2% (improved +5.6pt from -5.4% prior year) turned positive, but the high effective tax rate of 105% constrained improvement relative to Operating Margin. ROE -0.0% (improved from -8.8% prior year) — capital efficiency remains low though showing signs of exiting loss. EBIT margin aligns with Operating Margin at 2.8%. [Cash Quality] Despite Operating Income ¥15.6B, the effective tax rate 105% and interest expense ¥3.7B limit conversion of operating improvement into net profit and cash. Days Sales Outstanding (DSO) = year-end trade receivables ¥320.3B ÷ (annualized revenue ¥2,209.6B ÷ 365) ≒ 52.9 days — within an appropriate range. Days Inventory Outstanding (DIO) = year-end inventories ¥126.1B ÷ (annualized cost of sales ¥1,184.8B ÷ 365) ≒ 38.9 days. Days Payable Outstanding (DPO) = year-end trade payables ¥251.0B ÷ (annualized cost of sales ¥1,184.8B ÷ 365) ≒ 77.3 days. Cash Conversion Cycle (CCC) = 52.9 + 38.9 - 77.3 ≒ 14.5 days — a short and healthy level. [Investment Efficiency] ROIC = EBIT ¥15.6B × (1 - 0.105 effective tax rate) ÷ ((Net Assets ¥660.0B - Non-controlling interests ¥4.5B) + Interest-bearing debt (short- and long-term borrowings + corporate bonds) ¥169.4B) ≒ 1.7% — capital efficiency remains low. [Financial Soundness] Equity Ratio 41.9% (improved +2.0pt from 39.9% prior year), Current Ratio 173.7% (improved +5.5pt from 168.2% prior year), Quick Ratio 148.9% (improved +4.4pt from 144.5% prior year) — liquidity is ample with no short-term payment concerns. Debt/Equity 0.26 (net interest-bearing debt is negative because interest-bearing debt ¥169.4B - cash & short-term securities ¥307.5B yields net cash position), Interest Coverage 4.2x (Operating Income ¥15.6B ÷ interest expense ¥3.7B) — interest burden is manageable, but the high effective tax rate weakens resilience at the net income level. Goodwill ¥47.9B represents 7.3% of net assets, indicating limited impairment risk.
No cash flow statement was disclosed; analyzing balance sheet movements for cash trends shows cash and deposits decreased by ¥-55.7B from ¥280.2B to ¥224.5B year-on-year, and short-term securities decreased by ¥-33.0B from ¥116.0B to ¥83.0B, resulting in a decline in liquid assets of ¥-88.7B. Conversely, trade receivables increased ¥23.8B from ¥296.5B to ¥320.3B, and inventories increased ¥12.7B from ¥113.4B to ¥126.1B, expanding working capital by ¥36.5B and causing cash outflow at the operating level. Trade payables decreased ¥43.5B from ¥294.5B to ¥251.0B, accelerating cash outflows due to progressed supplier payments. Property, plant and equipment increased ¥12.0B from ¥348.7B to ¥360.7B, while intangible assets decreased ¥4.7B from ¥114.1B to ¥109.4B, reflecting mixed investing activity—capex outflows alongside depreciation and goodwill amortization reducing book values. Interest-bearing debt (short- and long-term borrowings + corporate bonds) decreased ¥18.6B from ¥188.0B to ¥169.4B, indicating net repayments in financing activities. Net assets increased ¥11.0B from ¥649.0B to ¥660.0B; although quarterly net income was ¥1.1B, Other Comprehensive Income ¥15.7B (foreign currency translation adjustment +¥15.7B, etc.) contributed, with currency factors enhancing capital quality. Overall, despite the operating profitability turnaround, expansion of working capital and reduction in trade payables caused cash outflows absorbed by declines in cash & short-term securities. Going forward, accelerating collection of trade receivables, optimizing inventory, and maintaining payable days are necessary to improve working capital efficiency and enhance Operating Cash Flow generation.
Earnings quality is generally assessed as recurring. Operating Income ¥15.6B depends primarily on Overseas Beverage Operating Income ¥22.9B, which includes yen depreciation effects and therefore is exposed to FX volatility. The narrowing of Domestic Beverage losses stems from structural measures (price revisions and cost efficiency) and is not attributable to one-off inventory gains or timing shifts in promotional expense recognition, implying sustainability. Non-operating income ¥5.7B (36.5% of Operating Income) is mainly interest income ¥3.3B; non-operating income to revenue ratio is 1.0%, below 5%, indicating high reliance on core business. Of non-operating expenses ¥16.7B, interest expense ¥3.7B and FX loss ¥0.4B are recurring burdens; no apparent extraordinary items. There is no divergence between Ordinary Income ¥4.6B and Pre-tax Income ¥4.6B, and no special gains/losses were recorded. Corporate taxes ¥4.8B produce an effective tax rate of 105%, suggesting material tax effect and permanent difference impacts and a significant divergence between taxable income and accounting profit. As a result, Net Income ¥1.1B is substantially diluted from Ordinary Income ¥4.6B; this appears to be a structural tax burden rather than clearly transient. Comprehensive Income ¥15.7B far exceeded consolidated Net Income -¥0.2B due to a foreign currency translation adjustment of ¥15.7B, reflecting translation gains on overseas subsidiaries recorded in equity. The divergence between Net Income and Comprehensive Income is FX-driven and represents non-cash valuation gains that do not directly enhance cash-based earnings quality. From an accrual perspective, while Operating Income is ¥15.6B, expansion in working capital (trade receivables +¥23.8B, inventories +¥12.7B, trade payables -¥43.5B) contributed to cash outflows, implying risk that Operating Cash Flow may trail Net Income. Improving sales receivable and inventory compression and optimizing payables are key to enhancing convergence between Operating Cash Flow and Net Income, thereby improving earnings quality.
Full Year / FY guidance is unchanged: Revenue ¥2,468.0B (YoY +2.3%), Operating Income ¥105.0B (+152.2%), Ordinary Income ¥84.0B (+472.5%), Net Income attributable to owners of the parent ¥50.0B, forecast EPS ¥157.73, forecast dividend ¥15.00 per share. Q1 progress to full-year: Revenue 22.4% (¥552.4B ÷ ¥2,468.0B), Operating Income 14.8% (¥15.6B ÷ ¥105.0B), Ordinary Income 5.5% (¥4.6B ÷ ¥84.0B), Net Income 2.2% (¥1.1B ÷ ¥50.0B) — all below standard quarter-based progress (25%). Profit progress lag is particularly pronounced: Operating Income -10.2pt, Ordinary Income -19.5pt, Net Income -22.8pt versus standard progress. Background factors include beverage business seasonality (concentration in Q2–Q3 summer period), Domestic Beverage making progress in loss reduction but not yet profitable, and interest and high tax burdens constraining ordinary and net profit generation. To achieve the full-year plan, improvements are required from Q2 onward in Domestic Beverage volumes and mix during the busy season, continued high-margin performance in Overseas Beverage, further SG&A efficiency gains, and working capital compression to generate cash. Weather and shifts in consumer sentiment pose risks to second-half revenue and profit targets, so progress monitoring is important.
Dividend forecast is ¥15.00 per share annually, unchanged from the prior year; payout ratio relative to full-year forecast EPS ¥157.73 is 9.5%, low. The company holds liquid assets cash ¥224.5B and short-term securities ¥83.0B totaling ¥307.5B, exceeding interest-bearing debt ¥169.4B, yielding a net cash position (net interest-bearing debt -¥138.1B) and providing sufficient dividend capacity. Based on shares outstanding at Q1-end 33,137 thousand shares, treasury stock 1,438 thousand shares, and weighted average shares during the period 31,699 thousand shares, the annual dividend payout equals approximately ¥480 million (¥15 × 31,699 thousand shares), representing 9.6% of full-year forecast net income ¥50.0B; dividend sustainability is not a concern. No share buyback was disclosed; shareholder returns consist only of dividends. The conservative payout below 10% reflects the recovery phase of Domestic Beverage profitability, limited Operating Cash Flow generation due to working capital inefficiency, and the need to reserve funds for growth investments (Overseas Beverage and Rare Disease Pharmaceuticals). Future dividend increases depend on Domestic Beverage achieving sustained profitability and improvement in FCF through working capital compression; sustained improvements in ROE and Operating Cash Flow are key for dividend hikes.
Risk of deterioration in Domestic Beverage profitability: The core business accounting for 57.4% of revenue mix remains unprofitable (operating loss ¥1.9B, operating margin -0.6%). If price competition intensifies, private-label competition increases, distribution contracts shrink, or adverse weather reduces demand, the loss could widen again and pressure consolidated operating income. Despite the large YoY improvement of +92.2%, profitability has not yet returned to positive and could worsen if price revision effects do not fully take hold or if raw material/logistics costs rise again.
High dependence on overseas business and FX risk: Overseas Beverage contributed Operating Income ¥22.9B, exceeding consolidated Operating Income ¥15.6B, resulting in extreme dependence on overseas operations. Yen weakness supported high growth (Revenue +28.0%), but a reversal to yen appreciation would materially reduce yen-consolidated revenue and profit, directly impacting consolidated earnings. Local market competition, regulatory changes, and geopolitical risks could also hinder overseas growth. The foreign currency translation adjustment of ¥15.7B was recorded in comprehensive income, but FX volatility can destabilize capital quality.
Working capital inefficiency and liquidity risk: Although days metrics (DSO 52.9 days, DIO 38.9 days, CCC 14.5 days) are reasonable on a short-term basis, year-on-year working capital changes (trade receivables +¥23.8B, inventories +¥12.7B, trade payables -¥43.5B) expanded working capital and squeezed Operating Cash Flow. If inventory aging or receivable collection delays persist, liquidity could deteriorate and declines in cash & short-term securities (¥-88.7B YoY) may accelerate. The combination of high effective tax rate 105% and interest expense ¥3.7B further limits cash-generation capacity despite operating profitability, posing a risk.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.8% | 5.2% (1.2%–6.4%) | -2.3pt |
| Net Profit Margin | -0.0% | 3.7% (0.3%–4.9%) | -3.8pt |
Operating Margin 2.8% is -2.3pt below the industry median 5.2%, and Net Profit Margin -0.0% is -3.8pt below median 3.7%. Despite high-margin Overseas Beverage (13.9%), losses in Domestic Beverage drag consolidated averages down, placing the company in the lower tier within the industry for profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 4.3% | 6.5% (3.8%–10.4%) | -2.2pt |
Revenue growth 4.3% trails industry median 6.5% by -2.2pt, with growth speed below industry average. Overseas Beverage grew +28.0%, but declines in Domestic Beverage -2.0%, Food -10.1%, and Pharmaceutical-related -11.5% diluted consolidated growth, placing the company mid-to-lower in industry growth rankings.
※ Source: Company aggregated
Continued high margin in Overseas Beverage and timing of Domestic Beverage profitability are key to consolidated profitability. Overseas Beverage contributes Operating Margin 13.9% and alone exceeds consolidated operating profit while Domestic Beverage still posts an operating loss ¥1.9B. Though YoY improvement was +92.2%, profitability has not been achieved; progress in price revision adoption, SG&A cuts, and volume/mix improvements during the busy season from Q2 onward will determine success in reaching profitability and meeting full-year targets. If yen weakness persists, yen-converted revenue and profit from Overseas Beverage will remain high, but downside risk exists if the yen appreciates.
Evaluate sustainability of operating profitability turnaround and margin improvement trend. Operating Margin improved from -2.7% to 2.8% (+5.5pt), Gross Margin +1.6pt, SG&A Ratio -3.9pt — indicating clear structural improvement. Easing logistics/material costs and cost-efficiency measures were effective, but full-year progress stands at Operating Income 14.8% versus standard 25% (-10.2pt lag). Even considering seasonality toward the second half, the lag is notable. The degree to which operating leverage works from Q2 onward, stability of raw material/packaging/logistics costs, and retention of Domestic Beverage price increases are prerequisites for sustained margin improvement — hence quarterly monitoring of Operating Margin is important.
Degree of improvement in working capital efficiency and cash generation. Despite operating profitability turnaround, working capital expanded (trade receivables +¥23.8B, inventories +¥12.7B, trade payables -¥43.5B) and cash & short-term securities decreased ¥-88.7B. High effective tax rate 105% and interest expense ¥3.7B mean Operating Cash Flow generation is limited. Trends in DSO, DIO, DPO and the extent of CCC shortening will determine capacity to secure dividends, growth investment funds, and financial flexibility. Inventory optimization, shortened collection cycles, and tightened credit control to compress working capital are keys to improving the quality of Net Income and Operating Cash Flow.
This report is an AI-generated earnings analysis created by analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the company based on public financial data. Investment decisions should be made at your own responsibility; consult a professional advisor as needed.