| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3043.5B | ¥2931.1B | +3.8% |
| Operating Income / Operating Profit | ¥165.2B | ¥155.1B | +6.5% |
| Ordinary Income | ¥168.3B | ¥159.6B | +5.4% |
| Net Income / Net Profit | ¥54.6B | ¥107.9B | -49.4% |
| ROE | 6.7% | 14.0% | - |
For the full year ended February 2026, Revenue was ¥3043.5B (YoY +¥112.4B +3.8%), Operating Income was ¥165.2B (YoY +¥10.1B +6.5%), Ordinary Income was ¥168.3B (YoY +¥8.6B +5.4%), and Net Income attributable to owners of the parent was ¥54.6B (YoY -¥53.3B -49.4%). While the company delivered growth in revenue and operating levels, Net Income declined substantially due to one-off items: impairment losses of ¥36.4B and gains on sales of fixed assets of ¥34.5B. Revenue was driven by the core Apparel & General Merchandise related business (95.2% of total) which grew +4.0%, Operating margin improved to 5.4% (up 0.1ppt from 5.3%), and Gross margin remained steady at 54.6% (prior year 54.7%). The decline from Ordinary Income to Net Income was primarily due to income before income taxes of ¥155.4B, income taxes of ¥60.5B (effective tax rate 38.9%) and the impact of special gains and losses. Operating Cash Flow was ¥205.7B (YoY -3.8%), Free Cash Flow was ¥110.5B, maintaining a robust financial base to cover dividends and share buybacks.
Revenue: External sales of the core Apparel & General Merchandise related business were ¥2896.6B (YoY +4.0%) and Other (Food & Beverage) was ¥147.6B (+1.0%), resulting in total Revenue of ¥3043.5B (+3.8%), driven by domestic demand recovery and penetration of omnichannel initiatives. Cost of sales was ¥1382.4B (+3.7%) in line with higher sales, with Gross margin at 54.6% (a slight -0.1ppt from 54.7% prior year). SG&A was ¥1495.8B (+3.4%), major components being rent ¥428.4B (14.1% of sales) and advertising expenses ¥91.9B (3.0% of sales). SG&A ratio improved to 49.1% (from 49.4% prior year, -0.3ppt), benefiting from operating leverage from sales growth. Profitability: Operating Income ¥165.2B (+6.5%) was driven by revenue growth and SG&A ratio improvement, with Operating margin of 5.4% (prior 5.3%, +0.1ppt). Non-operating items were minor (interest income ¥1.1B, interest expense ¥3.2B), and Ordinary Income ¥168.3B (+5.4%) reflected operating improvements. In special items, gain on sales of fixed assets ¥34.5B and impairment losses ¥36.4B roughly offset each other; loss on sale of subsidiary shares ¥6.95B and others led to total special losses of ¥47.4B exceeding special gains of ¥34.5B. Income before income taxes was ¥155.4B (+6.0%); after income taxes of ¥60.5B (effective tax rate 38.9%), Net Income was ¥54.6B (-49.4%), a substantial decline at the bottom line. The gap between Ordinary Income and Net Income was due to temporary gains/losses; underlying earnings power is reflected in the operating and ordinary income growth. Conclusion: Revenue and operating income increased, but Net Income decreased due to special losses.
The core Apparel & General Merchandise related business recorded Revenue ¥2897.7B (YoY +4.0%) and Segment Profit ¥173.0B (YoY +3.7%), comprising the majority of company Ordinary Income. Other (Food & Beverage) posted Revenue ¥147.6B (+1.0%) with a segment loss of ¥4.7B (narrowed from loss of ¥7.2B prior year), indicating improving profitability. The leading segment’s profit margin (Segment Profit / Revenue) is about 6.0% and stable; the narrowing loss in Other contributed to overall margin improvement. Segment differences reflect the high profitability of the core business and ongoing structural improvements in Other.
Profitability: ROE 6.7% (Net Income ¥54.6B / Equity ¥814.4B) declined from 13.1% prior year, mainly due to reduction in Net Income from one-off items. ROIC on an operating income basis (Operating Income ¥165.2B / Invested capital approx. ¥550B) is roughly equivalent to 30%, a high level. Operating margin 5.4% improved +0.1ppt from 5.3%, and Gross margin remains high at 54.6%. Cash Quality: Operating Cash Flow ¥205.7B is 3.77x Net Income ¥54.6B, indicating good cash conversion. OCF/EBITDA (Operating Cash Flow ¥205.7B / EBITDA ¥294.7B) is 0.70x; working capital increases (inventory -¥11.8B, trade receivables -¥12.0B) pressured cash flow, but cash generation remains stable. Investment Efficiency: Total asset turnover 2.18x (Revenue ¥3043.5B / Total assets ¥1396.9B) significantly exceeds the industry median 1.17x, indicating high asset efficiency. Inventory turnover days 81 days (Inventory ¥305.3B / daily sales ¥8.3B) exceeds industry median 66 days, showing inventory retention issues. Receivables days 19, payables days 36, yielding a working capital cycle of 64 days. Financial Soundness: Equity Ratio 58.6% (Net assets ¥818.2B / Total assets ¥1396.9B) exceeds industry median 50.2%, indicating strong capitalization. Current ratio 154.2% (Current assets ¥776.4B / Current liabilities ¥503.4B) and Quick ratio 93.6% indicate adequate short-term liquidity. Net cash (cash and deposits ¥249.1B - interest-bearing debt zero) implies effectively debt-free operations.
Operating Cash Flow was ¥205.7B (YoY -3.8%). Starting from income before taxes ¥155.4B and adding depreciation and amortization ¥129.5B, the subtotal of operating cash adjustments was ¥260.2B. This was reduced by working capital increases (inventory -¥11.8B, trade receivables -¥12.0B, trade payables +¥5.9B; net -¥18.0B) and income taxes paid ¥52.3B. Investing Cash Flow was -¥95.2B, driven by capital expenditures -¥94.2B (mainly stores and IT) and intangible asset acquisitions -¥44.3B, partially offset by proceeds from sale of fixed assets +¥47.2B. Capex/Depreciation ratio was 0.73x, indicating restrained, selective investment within depreciation. Free Cash Flow was ¥110.5B (Operating CF ¥205.7B + Investing CF -¥95.2B), sufficient to cover dividends of approximately ¥42.1B and share buybacks ¥6.4B. Financing Cash Flow was -¥74.3B, mainly dividends -¥46.9B, lease liabilities repayment -¥18.6B, and share buybacks -¥6.4B. Cash balance increased to ¥249.1B (from ¥211.4B prior year, +¥37.7B), and with effectively no debt, financial flexibility is high. Although working capital increases pressured Operating CF, FCF generation remains stable, enabling both shareholder returns and growth investment.
Ordinary Income ¥168.3B reflects operating performance; non-operating income/expense (non-operating income ¥8.0B - non-operating expense ¥5.0B) had a minor impact, about 0.1% of sales. In special items, gain on sales of fixed assets ¥34.5B (1.1% of sales) and impairment losses ¥36.4B (1.2% of sales) roughly offset; loss on sale of subsidiary shares ¥6.95B and others resulted in Net Income decline due to one-off items. Total special items amounted to about -12.9B (special gains ¥34.5B - special losses ¥47.4B), equivalent to approximately -74.6% of Net Income (after tax effects, the impact is about -¥8B). Therefore, assessing sustainable earnings should focus on Ordinary Income. Accrual ratio ((Net Income ¥54.6B - Operating CF ¥205.7B) / Total assets ¥1396.9B) = -10.8%, indicating Operating CF significantly exceeds Net Income, suggesting conservative accounting and high quality of earnings. Major non-operating income items were foreign exchange gains ¥2.0B and subsidy income ¥0.7B, which have limited persistence. Core earnings are generated at the operating level, and excluding one-off items, the underlying trend is revenue and operating income growth.
Full year forecast: Revenue ¥3140B (YoY +3.2%), Operating Income ¥172B (YoY +4.1%), Ordinary Income ¥172B (YoY +2.2%), Net Income attributable to owners of the parent ¥105B (YoY +92.3%), EPS ¥227.63. Progress against actual results is Revenue 96.9%, Operating Income 96.0%, Ordinary Income 97.8%, broadly in line with plan. The Net Income forecast ¥105B is a large increase from actual ¥54.6B, premised on normalization as one-off items (impairments, fixed asset sales, etc.) drop out. Operating margin is expected at 5.48% (¥172B/¥3140B), a 0.05ppt improvement from current 5.43%, assuming SG&A absorption and inventory efficiency improvements. Dividend forecast is annual ¥45, which appears halved from current annual ¥90 (interim ¥45, year-end ¥45), but this may be a notation on an annual basis and can be interpreted as effectively maintained. Revenue growth +3.2% assumes domestic consumption recovery and deeper omnichannel initiatives; Operating Income growth +4.1% factors in operating leverage. Risks include prolonged inventory retention (downward price pressure) and rising fixed rent costs; opportunities include improved same-store sell-through and further SG&A ratio decline.
Annual dividend is ¥90 (interim ¥45, year-end ¥45), with payout ratio 43.1% (dividend total ¥41.5B / Net Income ¥54.6B), at an appropriate level. With dividend total approx. ¥42B and Operating CF ¥205.7B, coverage is 4.93x; even with FCF ¥110.5B coverage is 2.66x, indicating high sustainability. Share buybacks totaled ¥6.4B, and combined with dividends total shareholder returns were approx. ¥48B, implying a Total Return Ratio of 87.6%, a high level. Capex/Depreciation is 0.73x, keeping investment within depreciation and selective for growth. Next fiscal year dividend forecast is ¥45 (stated on an annual basis and presumed to imply effective maintenance). The company targets around 40% payout ratio and aims for stable dividends even with Net Income volatility from one-off items. Strong FCF generation allows room for dividend increases during recovery phases.
Industry position (reference, company analysis): Compared with the retail segment 2025 fiscal year industry medians, the company outperforms on asset efficiency with total asset turnover 2.18x (industry median 1.17x) and on profitability with Operating margin 5.4% (median 4.6%). Equity Ratio 58.6% (median 50.2%) and Current ratio 154.2% (median converted to 1.84x = 184%) indicate strong financial health. Conversely, inventory turnover days 81 days exceed the median 66 days, indicating inventory efficiency issues. Payout ratio 43.1% far exceeds the median 27%, showing strong shareholder return orientation. ROE 6.7% (median 5.9%) declined due to temporary Net Income reduction but remains at industry level. Revenue growth +3.8% (median +4.3%) slightly lags, but Operating CF margin 6.8% (Operating CF ¥205.7B / Revenue ¥3043.5B) is above industry average. Overall, the company ranks highly on asset efficiency, profitability, and financial soundness; improving inventory management would further enhance competitive advantage.
Three key points from the results: First, there is a divergence between operating-level improvement (Operating Income +6.5%, Operating margin +0.1ppt) and Net Income decline due to special items; sustainable earnings are reflected by the operating and ordinary income increases. Second, strong cash generation with Operating CF ¥205.7B and FCF ¥110.5B underpins a financial base that can sustain high shareholder returns (payout ratio 43.1%, Total Return Ratio 87.6%). Selective investment within a Capex/Depreciation ratio of 0.73x allows balancing shareholder returns and growth. Third, optimization potential exists in two major fixed-cost areas: inventory turnover days 81 (above industry median 66) and rent ratio 14.1%; improving inventory efficiency and exiting unprofitable stores could push Operating margin above 5.5%. Next fiscal year forecasts (Operating Income +4.1%, Operating margin 5.48%) assume SG&A leverage and inventory optimization, with feasibility depending on same-store sell-through and rent negotiation power.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings announcement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by our firm based on public financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary.