DyDo GROUP HOLDINGS,INC. FY2026 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥184.95B
• Operating Income: ¥5.22B
• Net Income: ¥7.33B
• EPS: ¥14.80

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

DyDo Group Holdings (25900) reported FY2026 Q3 consolidated results under JGAAP showing modest top-line growth but sharp profit compression down the P&L. Revenue rose 2.7% year over year to ¥184.95bn, supported by resilient sales but offset by rising costs further down the income statement. Gross profit reached ¥83.68bn, equating to a solid gross margin of 45.2%, indicating decent pricing and mix, though we lack YoY gross margin to confirm improvement. Operating income declined 18.3% YoY to ¥5.22bn, signaling negative operating leverage as SG&A and/or other operating costs outpaced revenue growth. Ordinary income fell to ¥3.11bn, reflecting elevated non-operating burdens; the gap from operating income (approximately ¥2.1bn) highlights higher interest and other non-operating items. Net income dropped to ¥0.47bn (down 93.5% YoY), driven by heavy tax charges (income tax expense ¥3.23bn) and financing/other costs, compressing net margin to just 0.25%. DuPont analysis shows a calculated ROE of 0.50%, with asset turnover of 0.96x and financial leverage of 2.04x; the ROE weakness is primarily due to the unusually low net margin. Liquidity appears sound with a current ratio of 144.8% and quick ratio of 127.5%, and working capital of ¥28.50bn supports near-term obligations. The balance sheet shows total assets of ¥192.67bn and total equity of ¥94.26bn, implying an equity ratio near 49% from non-zero figures, even though the reported equity ratio field shows 0.0% (undisclosed format). Interest expense of ¥0.66bn is covered about 7.9x by operating income, indicating manageable interest burden at current earnings levels. The tax burden in the period appears exceptionally heavy (income tax ¥3.23bn versus pre-tax proxy), which likely reflects one-off items and/or timing effects; clarity is limited due to disclosure constraints. Cash flow data, D&A, and EBITDA were not disclosed (recorded as 0), limiting our ability to assess earnings-to-cash conversion and capital intensity, which are typically important for a vending/beverage model. Capital structure leverage appears moderate on a balance sheet basis (assets/equity 2.04x), offering some buffer despite weaker earnings. Dividend data are undisclosed (DPS 0), preventing a payout assessment from actual FCF; historically, this sector emphasizes stable shareholder returns, but we refrain from extrapolation without disclosed numbers. Overall, the quarter evidences pressure from cost inflation and non-operating/tax items, resulting in subdued ROE despite reasonable asset turnover and liquidity. Our analysis is constrained by missing cash flow, D&A, and share data; conclusions therefore emphasize the available non-zero items and derived ratios.

Profitability Analysis

ROE_decomposition: Reported/Calculated ROE is 0.50%, driven by Net Profit Margin of 0.25%, Asset Turnover of 0.96x, and Financial Leverage of 2.04x. The main drag is the thin net margin; asset efficiency is reasonable and leverage is moderate. margin_quality: Gross margin of 45.2% (gross profit ¥83.68bn on revenue ¥184.95bn) is healthy for the category. Operating margin compressed to ~2.8% (¥5.22bn/¥184.95bn), indicating SG&A and other operating costs outpaced sales. Ordinary margin is ~1.7% (¥3.11bn/¥184.95bn). Net margin is 0.25% due to high non-operating costs and taxes. Effective tax burden appears unusually high in the period versus pre-tax proxy, depressing bottom-line profitability. operating_leverage: Revenue grew 2.7% YoY while operating income declined 18.3% YoY, implying negative operating leverage in the quarter. This suggests cost inflation (e.g., logistics, utilities, inputs) and/or higher selling expenses outweighed pricing/mix benefits.

Growth Assessment

revenue_sustainability: Top-line growth of 2.7% YoY to ¥184.95bn indicates steady demand, likely supported by price/mix and stable volumes. Sustainability will hinge on competitive pricing and vending/channel performance through seasonally important periods. profit_quality: The deterioration from operating to net income—driven by ¥0.66bn interest expense, other non-operating items (OI to ordinary gap ~¥2.1bn), and ¥3.23bn in taxes—points to low earnings quality this quarter. Absent cash flow disclosure and D&A, we cannot corroborate underlying profitability with cash metrics. outlook: Assuming cost pressures ease and tax effects normalize, margins could recover from Q3 lows; however, the near-term outlook remains constrained by cost inflation and non-operating burdens. Maintaining gross margin near mid-40s% is supportive, but operating discipline is required to re-expand operating margin toward prior levels.

Financial Health

liquidity: Current assets ¥92.04bn vs. current liabilities ¥63.55bn yields a current ratio of 144.8% and a quick ratio of 127.5%, with working capital of ¥28.50bn, indicating comfortable near-term liquidity. solvency: Total assets ¥192.67bn and total equity ¥94.26bn imply equity ratio near ~49% and financial leverage of 2.04x. Interest coverage is 7.9x (¥5.22bn OI / ¥0.66bn interest), suggesting manageable debt service at current earnings. capital_structure: Total liabilities are ¥91.74bn. Debt-to-equity is shown as 0.97x (interest-bearing debt breakdown undisclosed). Overall leverage appears moderate given assets/equity levels.

Cash Flow Quality

earnings_quality: OCF, FCF, and D&A were undisclosed (recorded as 0), so we cannot confirm cash conversion or non-cash components. The sharp gap between operating income (¥5.22bn) and net income (¥0.47bn) reflects heavy non-operating and tax burdens, elevating earnings volatility. FCF_analysis: Free cash flow was not disclosed. Without OCF and capex data, FCF coverage of dividends and reinvestment needs cannot be assessed. working_capital: Inventories are ¥11.04bn (within current assets of ¥92.04bn). Changes in receivables/payables are not disclosed, so we cannot assess working capital drag or release this period.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratios are undisclosed (shown as 0). Given net income of ¥0.47bn and lack of OCF data, we cannot compute a reliable payout ratio. FCF_coverage: FCF coverage is undisclosed due to missing OCF and investing cash flows. Therefore, dividend coverage by FCF cannot be evaluated. policy_outlook: With net margin at 0.25% and ROE at 0.50% in Q3, prudent capital allocation would prioritize balance sheet strength until margins normalize; however, absence of dividend policy disclosure in this data set limits further assessment.

Risk Assessment

Business Risks:

• Input cost inflation (coffee beans, sweeteners, packaging materials, energy) compressing margins
• Higher utilities and maintenance costs in vending operations affecting operating leverage
• Competitive pricing pressure in beverages and vending channels
• Weather and seasonality impacts on demand
• Regulatory and tax changes affecting effective tax rate
• FX volatility impacting imported raw materials

Financial Risks:

• Elevated tax expense driving volatility in net income
• Interest expense of ¥0.66bn; sensitivity to interest rate movements
• Potential for non-operating losses impacting ordinary income
• Dependence on working capital management amid cost inflation
• Limited visibility due to undisclosed cash flow and D&A data

Key Concerns:

• Negative operating leverage: OI down 18.3% YoY despite 2.7% revenue growth
• Very low net margin (0.25%) leading to weak ROE (0.50%)
• High apparent tax burden (income tax ¥3.23bn) suppressing bottom line
• Non-operating drag (OI to ordinary income gap ~¥2.1bn) weighing on earnings
• Missing cash flow and D&A disclosures constrain assessment of sustainability

Investment Implications

Key Takeaways:

• Top-line growth of 2.7% YoY to ¥184.95bn but significant margin compression
• Operating income down 18.3% YoY to ¥5.22bn; negative operating leverage evident
• Ordinary income ¥3.11bn and interest expense ¥0.66bn reduce earnings resilience
• Net income collapses to ¥0.47bn as taxes surge to ¥3.23bn
• ROE 0.50% driven by very low net margin; asset turnover remains decent at 0.96x
• Liquidity is solid (current ratio 144.8%, quick ratio 127.5%, WC ¥28.50bn)
• Moderate leverage (assets/equity 2.04x) provides balance sheet cushion
• Data gaps (OCF, FCF, D&A, DPS) limit visibility on cash generation and distributions

Metrics to Watch:

• Operating margin trajectory and SG&A-to-sales ratio
• Gross margin sustainability around mid-40s%
• Ordinary income vs. operating income gap (non-operating items)
• Interest expense and coverage ratio
• Effective tax rate normalization and drivers of tax expense
• Asset turnover and inventory efficiency
• Disclosure of OCF, capex, D&A to assess FCF
• Leverage (net debt/EBITDA once data disclosed)

Relative Positioning: Within Japan beverages/vending peers, DyDo shows resilient gross margins but weaker operating leverage and unusually high tax/non-operating burdens this quarter; balance sheet liquidity and moderate leverage mitigate risk, yet earnings quality trails peers pending normalization of non-operating and tax items.

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