| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥7937.5B | ¥7681.3B | +3.3% |
| Operating Income | ¥257.8B | ¥233.9B | +10.2% |
| Ordinary Income | ¥266.4B | ¥243.5B | +9.4% |
| Net Income | ¥229.9B | ¥110.9B | +107.3% |
| ROE | 9.8% | 5.0% | - |
For the fiscal year ended March 2026, EDION achieved revenue of ¥7,937.5B (YoY +¥256.2B, +3.3%), Operating Income of ¥257.8B (YoY +¥23.9B, +10.2%), Ordinary Income of ¥266.4B (YoY +¥22.9B, +9.4%), and Net Income attributable to owners of parent of ¥154.5B (YoY +¥13.4B, +9.5%), delivering both top-line and bottom-line growth. Operating margin improved by 0.2pt to 3.2% from 3.0% a year earlier; a reduction in SG&A ratio (25.4%, -0.6pt from 26.0%) offset a slight decline in gross margin (28.7%, -0.3pt from 29.0%) and drove operating-level profit growth. A special loss of ¥42.5B (mainly impairment ¥28.6B) was recorded, but this was not materially different from prior year special losses of ¥33.1B. Operating Cash Flow remained healthy at ¥308.3B (prior year ¥307.1B, +0.4%).
Revenue: Revenue reached ¥7,937.5B (YoY +3.3%). Durable consumer goods demand remained firm, and store operations efficiency contributed, centered on the consumer electronics retail business. The business is concentrated in a single segment with no external sales outside Japan; same-store sales growth domestically and improved promotional efficiency are inferred as primary drivers of revenue growth. Cost of sales rose to ¥5,661.3B (prior year ¥5,452.6B, +3.8%), outpacing revenue growth slightly and resulting in a gross margin of 28.7% (down 0.3pt from 29.0%). Price competition and an EC shift likely pressured gross margin through discounting.
Profitability: SG&A was controlled at ¥2,018.4B (prior year ¥1,994.7B, +1.2%), well below revenue growth, resulting in an SG&A ratio of 25.4% (down 0.6pt from 26.0%) and improved efficiency. Consequently, Operating Income rose to ¥257.8B (prior year ¥233.9B, +10.2%), outpacing revenue growth, and Operating Margin improved to 3.2% (up 0.2pt from 3.0%). Non-operating items were roughly flat YoY with non-operating income of ¥20.0B and non-operating expenses of ¥11.5B. Ordinary Income stood at ¥266.4B (prior year ¥243.5B, +9.4%), sustaining operating-level profit gains. Extraordinary items comprised special gains of ¥4.0B (including ¥1.9B gain on sales of fixed assets) and special losses of ¥42.5B (impairment ¥28.6B, loss on retirement of fixed assets ¥8.6B, etc.), resulting in Profit before Tax of ¥227.9B (prior year ¥211.9B, +7.6%). After income taxes of ¥72.4B (effective tax rate 31.8%), Net Income attributable to owners of parent was ¥154.5B (prior year ¥141.2B, +9.5%), with Net Margin improving modestly to 1.9% (up 0.1pt from 1.8%). In summary, a slight decline in gross margin was absorbed by improved SG&A efficiency, delivering revenue and profit growth.
Profitability: Operating Margin 3.2% (up 0.2pt from 3.0%), Net Margin 1.9% (up 0.1pt from 1.8%). ROE stood at 9.8%, decomposed as Net Margin × Total Asset Turnover 1.83 × Financial Leverage 1.85. Gross Margin 28.7% decreased 0.3pt from 29.0%, but SG&A ratio improvement to 25.4% (down 0.6pt from 26.0%) supported Operating Margin expansion.
Cash Quality: Operating CF / Net Income ratio 2.00x, Accrual Ratio -3.5% (Operating CF ¥308.3B – Net Income ¥154.5B ÷ Total Assets ¥4,335.5B), indicating strong cash realization of earnings. OCF / EBITDA was 0.83x (Operating CF ¥308.3B ÷ EBITDA approx. ¥370B: Operating Income ¥257.8B + Depreciation ¥112.8B), which is somewhat weak and affected by working capital movements.
Investment Efficiency: Total Asset Turnover 1.83x (Revenue ¥7,937.5B ÷ Average Total Assets ¥4,342B), improved from 1.77x prior. Inventory turnover days were long at 75 days (Inventories ¥1,161.2B ÷ Cost of Sales ¥5,661.3B × 365), indicating room to improve inventory efficiency. Capex / Depreciation was 0.93x, generally at renewal levels.
Financial Soundness: Equity Ratio 54.2% (up 3.0pt from 51.2%), Current Ratio 147.2% (up 14.6pt from 132.6%), indicating improved solvency. Interest-bearing debt was ¥574.1B (short-term borrowings ¥132.0B, long-term borrowings ¥442.1B), Debt / EBITDA 1.55x, Debt / Equity 24.4%, conservative. Interest Coverage was 42.7x (Operating Income ¥257.8B ÷ Interest Expense ¥6.0B), indicating high interest-bearing capacity. Quick Ratio was 56.8% (Quick Assets ¥729.2B ÷ Current Liabilities ¥1,285.3B), which is low; the high reliance on inventories in current assets weakens short-term liquidity cushion.
Operating CF was ¥308.3B (prior year ¥307.1B, +0.4%), maintaining strength and representing 2.00x of Net Income ¥154.5B, indicating good cash conversion. Subtotal (before working capital changes) was ¥403.5B, with non-cash additions including Depreciation ¥112.8B and Impairment ¥28.6B. Working capital changes included Inventory decrease of ¥40.1B as a cash inflow, while Accounts Receivable increase of ¥7.7B and Accounts Payable decrease of ¥22.6B were cash outflows; an increase in Contract Liabilities of ¥33.5B partially offset outflows. After tax payments of ¥92.6B, final Operating CF totaled ¥308.3B.
Investing CF was -¥151.0B, primarily capex of -¥104.6B. Purchase of intangible assets -¥22.5B and acquisition of shares of subsidiaries -¥14.3B were also recorded, partially offset by proceeds from sale of tangible fixed assets ¥13.0B. Free Cash Flow was ¥157.3B (Operating CF ¥308.3B + Investing CF -¥151.0B), covering dividends ¥49.6B by about 3.2x, and covering the sum of dividends and capex ¥154.2B by 1.02x, indicating self-sufficiency. Financing CF was -¥156.1B, comprising net reduction in short-term borrowings ¥180.6B, long-term borrowings raised ¥140.0B and repaid ¥39.8B, dividends ¥45.8B, and share buybacks ¥28.6B. Large reduction in short-term borrowings reduced maturity mismatch risk and improved capital structure stability.
Recurring earnings are anchored by Operating Income ¥257.8B from core consumer electronics retail operations. Non-operating income ¥20.0B (other non-operating income ¥11.6B, interest and dividends received ¥1.3B, etc.) and non-operating expenses ¥11.5B (interest expense ¥6.0B, fees paid ¥1.0B, other non-operating expenses ¥4.4B) are all minor at 0.1–0.3% of sales, so Ordinary Income ¥266.4B largely reflects operating-level profitability. One-off items included Special Loss ¥42.5B (mainly impairment ¥28.6B, loss on retirement of fixed assets ¥8.6B) and Special Gain ¥4.0B (gain on sale of fixed assets ¥1.9B, etc.), netting approximately -¥38.5B of impact on Net Income (about 25% of Net Income), which is material. Impairments indicate reduced profitability of store assets; continued occurrences suggest asset efficiency challenges. Accrual Ratio -3.5% is favorable and Operating CF / Net Income 2.00x is high, but OCF / EBITDA 0.83x is somewhat weak, influenced by working capital (inventory and payables) movements. The divergence between Ordinary Income and Net Income is driven by special losses; normalizing adjustments for special items are useful to assess underlying profit levels.
Full-year guidance expects Revenue ¥8,160.0B (YoY +2.8%), Operating Income ¥270.0B (YoY +4.7%), Ordinary Income ¥270.0B (YoY +1.3%), and Net Income attributable to owners of parent ¥157.0B. Operating Income is projected to increase ¥12.2B from prior-year actual ¥257.8B, reflecting a conservative assumption of continued SG&A efficiency improvements. Ordinary Income is forecast equal to Operating Income at ¥270.0B, implying net non-operating effects estimated at zero. Full-year EPS forecast is ¥148.48, a slight increase from prior-year actual ¥146.36. Full-year dividend forecast of ¥25 is maintained as a year-end dividend, and the payout ratio is considered sustainable relative to the full-year net income forecast. Progress rates are Revenue 97.3%, Operating Income 95.5%, Ordinary Income 98.7%, indicating overall performance roughly in line with plan.
A year-end dividend of ¥25 and interim dividend of ¥23 were paid for a full-year dividend of ¥48. Payout ratio was 34.8% (Dividend ¥48 ÷ EPS ¥146.36 × annual total dividend amount basis ¥49.6B), at a sustainable level. Free Cash Flow ¥157.3B covers total dividends ¥49.6B by about 3.2x, indicating sufficient dividend-paying capacity. Share buybacks of ¥28.6B were also executed; combined with dividends ¥49.6B, the Total Return Ratio was approximately 50.6% (Total Returns ¥78.2B ÷ Net Income ¥154.5B). Full-year guidance anticipates a year-end dividend of ¥25; based on EPS forecast ¥148.48, the implied payout ratio is about 16.8%, which is modest, though details of full-year dividend total including interim were not specified. Cash and deposits ¥89.6B, Operating CF ¥308.3B, and Equity Ratio 54.2% indicate a stable financial base and limited risk of dividend reduction.
Gross Margin Pressure: Gross Margin of 28.7% decreased 0.3pt from 29.0%, with ongoing discount pressure due to price competition and EC shift. Cost of sales growth (+3.8%) outpaced revenue growth (+3.3%), and deterioration in product mix or procurement terms pressured gross margin. In addition to structural margin decline trends in the consumer electronics retail industry, an economic slowdown could necessitate further discounting; with Operating Margin at a low 3.2%, margin buffers are limited.
Inventory Obsolescence Risk: Inventory turnover days of 75 greatly exceed durable goods retail benchmarks (45–60 days), indicating inventory efficiency issues. Inventories ¥1,161.2B account for 61.4% of current assets; slow adjustment to demand shifts or product cycle changes could increase risk of discounting and valuation losses. Low Quick Ratio of 56.8% also reflects high inventory dependence and weak short-term liquidity cushion.
Impairment Recurrence Risk: This period’s impairment loss ¥28.6B follows ¥24.4B in the prior year, indicating continued deterioration in store asset profitability. Impairments are added back as non-cash items in Operating CF but signal deteriorating asset efficiency and can increase future Net Income volatility. Asset retirement obligations ¥124.2B (6.3% of total liabilities) present potential cash outflow risks upon store closures or refurbishments.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.2% | 4.6% (1.7%–8.2%) | -1.4pt |
| Net Margin | 2.9% | 3.3% (0.9%–5.8%) | -0.4pt |
Operating Margin is 1.4pt below the retail industry median, indicating remaining room for SG&A efficiency improvements.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.3% | 4.3% (2.2%–13.0%) | -1.0pt |
Revenue growth is 1.0pt below median but above the first quartile (2.2%), and generally secures industry-comparable growth.
※ Source: Company compilation
Profit improvement driven by cost efficiency: SG&A ratio improved to 25.4% (down 0.6pt from 26.0%), and Operating Margin rose to 3.2% (up 0.2pt from 3.0%). Operating Income growth of +10.2% far exceeded revenue growth of +3.3%, reflecting effective cost control. Operating CF / Net Income 2.00x and Accrual Ratio -3.5% indicate high earnings quality and reliable cash-based profitability. Large reduction in short-term borrowings (-57.8%) and conservative leverage (Debt / EBITDA 1.55x) demonstrate stable financial footing.
Room to improve inventory efficiency and operating margin: Inventory turnover days of 75 exceed industry benchmarks and, combined with gross margin pressure, impede profitability improvement. Operating Margin of 3.2% is 1.4pt below the retail industry median of 4.6% and is sensitive to fixed-cost inflation. Increase in Contract Liabilities to ¥368.99B (+¥33.5B) indicates expansion of advance revenue sources and strengthening of ancillary services (installation, construction, warranty, etc.) could be key to improving gross margin and customer loyalty.
Assessment of one-off items vs. recurring profit: Special Loss ¥42.5B (mainly impairment ¥28.6B) equals about 25% of Net Income and points to asset efficiency issues if recurring. Ordinary Income ¥266.4B largely reflects operating-level earnings and the full-year forecast assumes continued modest growth (Operating Income ¥270.0B, Ordinary Income ¥270.0B). Normalization of special items would reduce Net Income volatility and strengthen dividend sustainability (year-end ¥25, payout ratio 34.8%).
This report is generated by AI analyzing XBRL financial statement data to produce an earnings analysis document. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as appropriate before making any investment decisions.