AMIYAKI TEI (2753) FY2027 Q1 Earnings Report

Quick View

Executive Summary

The most important point this quarter was that the increase in gross profit margin was insufficient to absorb costs, resulting in sluggish Operating Income growth despite higher Revenue. Revenue was ¥9.89B (+10.1% YoY), Operating Income was ¥0.51B (+1.2%), Ordinary Income was ¥0.54B (+2.7%), and Net Income attributable to owners of the parent was ¥0.31B (+13.2%). The gross profit margin declined to 58.8% from the previous year, and rising costs pushed the Operating Income margin down to 5.2% (5.6% in the previous year), while the reduction in extraordinary losses contributed to the increase in Net Income.

Factors Affecting Results

【Revenue】Revenue increased to ¥9.89B (+10.1% YoY). By segment, the Yakiniku Business generated ¥5.46B (55.2% of total, +2.3%), the Restaurant Business generated ¥2.71B (27.4%, +18.1%), the Yakitori Business generated ¥1.05B (10.6%, +8.4%), and the Other Businesses generated ¥0.68B (6.8%, +75.3%). While growth in the core Yakiniku Business slowed, the Restaurant Business and Other Businesses drove the increase in Revenue.

【Profit and Loss】Operating Income was limited to ¥0.51B (+1.2%), as Cost of Sales increased 12.1%, exceeding the Revenue growth rate and causing the gross profit margin to decline to 58.8%. Although the SG&A expense ratio improved to 53.7% from the previous year, company-wide expenses increased 29.2%, restraining earnings growth. Ordinary Income was ¥0.54B, supported by a small positive balance in non-operating income and expenses. Net Income was ¥0.31B (+13.2%), as extraordinary losses decreased from ¥0.030B in the previous year to ¥0.019B. Although both Revenue and earnings increased, profit growth lagged Revenue growth, representing a period of modest earnings growth despite higher Revenue.

Segment Analysis

The Yakiniku Business recorded Revenue of ¥5.46B (+2.3%) and segment profit of ¥0.29B (△0.7%), with its margin declining to 5.4% (△0.2pt YoY). The Yakitori Business recorded Revenue of ¥1.05B (+8.4%) and profit of ¥0.08B (△6.8%), with its profit margin at 7.8% (△1.3pt), representing the largest decline among the four businesses. The Restaurant Business achieved both higher Revenue and higher profit, with Revenue of ¥2.71B (+18.1%) and profit of ¥0.18B (+15.8%); its profit margin remained broadly flat at 6.8% (△0.1pt). The Other Businesses recorded Revenue of ¥0.68B (+75.3%) and profit of ¥0.015B (+15.4%), but their profit margin declined to 2.2% (△1.2pt). Company-wide expenses were ¥0.062B (¥0.048B in the previous year, +29.2%), becoming a factor restraining the increase in consolidated Operating Income.

Key Financial Indicators

【Profitability】The Operating Income margin of 5.2% declined from 5.6% in the same period of the previous year, as the decline in the gross profit margin to 58.8% (59.6% in the previous year) exceeded the improvement in the SG&A expense ratio to 53.7% (54.0% in the previous year). The Net Income margin improved from the previous year to 3.1%. 【Cash Quality】Cash and deposits amounted to ¥8.33B, a decrease of △5.7% year on year, while inventories increased primarily due to higher raw material inventories. 【Investment Efficiency】Annualized ROE was 5.5% and annualized ROA was approximately 4.2%. The combination of a low total asset turnover ratio of 1.352x and low financial leverage of 1.30x indicates a structure in which improved profitability will be the primary driver of higher ROE. 【Financial Soundness】The Equity Ratio was 76.8% (75.9% in the previous year), the current ratio was 230.0%, and cash and deposits of ¥8.329B substantially exceeded interest-bearing debt of ¥0.828B, indicating a conservative and robust financial foundation.

Cash Flow Analysis

As detailed items from the cash flow statement were not disclosed, funding trends are analyzed based on changes in the balance sheet. Cash and deposits declined by ¥0.50B to ¥8.33B from ¥8.83B in the same period of the previous year. The increase in raw material inventories (+¥0.16B), investments in property, plant and equipment, and repayment of borrowings (long-term borrowings decreased from ¥0.57B to ¥0.53B) appear to have used funds. Meanwhile, retained earnings were virtually unchanged at ¥17.57B from ¥17.57B, as dividend payments and profit recognition offset each other. Interest-bearing debt remained low at ¥0.83B, and the Company continues to manage its finances by funding investments and repayments through internal funds and cash balances.

Quality of Earnings

The difference between Operating Income and Ordinary Income was primarily attributable to non-operating income of ¥0.034B, including interest income, and was recurring in nature. The conversion rate from Ordinary Income of ¥0.54B to Net Income of ¥0.31B was limited to approximately 57%, as the effective tax rate remained high at approximately 40.6%, restraining profit conversion. Extraordinary losses were ¥0.019B, consisting of ¥0.009B in losses on disposal of fixed assets and ¥0.007B in impairment losses on stores. Their decline from ¥0.030B in the same period of the previous year was one factor that pushed the Net Income growth rate above the Operating Income growth rate. Comprehensive Income was ¥0.308B, broadly in line with Net Income, with no significant divergence attributable to valuation differences on other securities or similar items; the quality of earnings was generally stable.

Earnings Forecast and Guidance

The full-year Company plan calls for Revenue of ¥41.10B (+9.0% YoY), Operating Income of ¥2.50B (+13.1%), and Ordinary Income of ¥2.54B (+8.3%), with no forecast revision during the quarter. Q1 progress rates were 24.1% for Revenue, 20.4% for Operating Income, 21.2% for Ordinary Income, and 21.2% for Net Income, all below the standard 25%. The full-year plan assumes an improvement in the Operating Income margin to 6.1%; recovering the gap from Q1's actual margin of 5.2% will require either a recovery in the gross profit margin or restraint in company-wide expenses from Q2 onward.

Shareholder Returns

The full-year dividend forecast is ¥34.0 per share, with no revision during the quarter. Based on forecast EPS of ¥70.57, the forecast Payout Ratio (dividends only) is approximately 48.2%, and the annual total dividend payment based on the number of shares outstanding is estimated at approximately ¥0.699B. Treasury shares totaled 630 shares, a small amount, and the identifiable shareholder return is primarily dividends. The financial foundation of ¥8.33B in cash and deposits and ¥0.83B in interest-bearing debt supports the stability of dividend payments.

Risk Factors

1. Cost pressure from higher raw material and labor costs: Cost of Sales increased +12.1% YoY, exceeding the Revenue growth rate of +10.1%, and the gross profit margin declined to 58.8%. The provision for bonuses also increased by +68.2%; continued increases in fixed costs could cause a further decline in profit margins.

2. Trend of higher Revenue but lower profit in core businesses: The Yakiniku Business recorded segment profit of △0.7% against Revenue growth of +2.3%, while the Yakitori Business experienced a 1.3pt YoY decline in its segment profit margin, indicating Revenue growth without corresponding earnings improvement.

3. High effective tax rate and asset retirement obligations: The effective tax rate was high at approximately 40.6%, restraining the conversion of Profit Before Tax into Net Income. Asset retirement obligations of ¥0.548B account for 8.1% of total liabilities, and the funding burden could increase if store closures and restoration work expand.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (retail)

Profitability and Returns

Both the Operating Income margin and Net Income margin exceeded the industry median, indicating that profitability is relatively favorable within the peer group.

Growth and Capital Efficiency

The Revenue growth rate also exceeded the industry median, but did not reach the IQR upper bound of 14.4%, placing the Company in the upper-middle range of industry growth.

※Source: Compiled by the Company

Key Earnings Highlights

1. While achieving Revenue growth of 10.1%, the decline in the gross profit margin and the increase in company-wide expenses (+29.2%) caused the Operating Income margin to decline to 5.2%, leaving room for improvement toward the 6.1% assumed in the full-year plan.

2. By segment, the Restaurant Business drove higher Revenue and profit, while the core Yakiniku Business and Yakitori Business saw profit growth fail to keep pace with Revenue growth, resulting in lower profit margins.

3. Although the Equity Ratio of 76.8%, current ratio of 230.0%, and interest-bearing debt of ¥0.83B indicate a conservative and robust financial foundation, annualized ROE of 5.5% suggests room to improve capital efficiency within the industry.

Theoretical Share Price (Reference Value)

Sensitivity: ¥973–¥1,028 at Cost of Equity ±1%, and ¥997–¥1,002 at ω±0.1.

Notes:

• As forecast ROE is below the Cost of Equity, the theoretical value is below Book Value per Share.
• Net assets as of the quarter-end are used (there is a timing difference from the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / This is a mechanically calculated value based solely on publicly disclosed data and is not a forecast of the market share price, a recommendation of any specific investment action, or a prediction or guarantee of the future share price.)

---

This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.

---End of Report---